Banks Under Pressure: When CRE Delinquencies Breach Reserve Lines

DONNA DELAROSABlog

Banking and commercial real estate (CRE) have always been interconnected. When CRE performs well, banks enjoy predictable income streams, stable deposits, and manageable risk exposures. But when CRE weakens—banks feel it first, and they feel it hard. Today, that pressure is reaching a critical point. Office vacancies remain historically high. The shift to hybrid work continues to reduce demand. Maturing …

Banks Under Pressure: When CRE Delinquencies Breach Reserve Lines

DONNA DELAROSABlog

Banking and real estate are tightly interwoven. That’s never been more evident than now—when elevated commercial real estate (CRE) delinquencies are beginning to bite into core balance sheet resilience. As regulators and investors alike watch closely, banks must not treat this as a niche exposure but as a frontline risk. In 2024–2025, banks have faced a rise in CRE noncurrent …