Sales of commercial real estate in the U.S. fell by 56% at the beginning of 2023.

As is known, the total amount of commercial and combined mortgage debt stands at $4.5 trillion. Analysis for the first quarter showed that the U.S. commercial real estate market is facing an unprecedented period of transformation. Changes in the fundamental characteristics of properties, interest rates, property values, and other factors have led to a noticeable slowdown in transactional activity - sales volume in the first quarter of 2023 decreased by 56 percent compared to the previous year. The MBA survey for the first quarter also indicated that the delinquency rate for office property mortgages increased by 110 basis points. Data from the Board's Senior Loan Officer Opinion Survey (from January - with a recent focus on banks) showed that 58 percent of respondents tightened their standards for commercial loan issuance, and 57 percent specifically for multifamily loans.

There is no doubt that the commercial real estate markets are undergoing a period of change. However, recently two questions have been drawing particular attention in the headlines about commercial real estate: a) the dependence of banks on commercial real estate and b) the dependence of commercial real estate on banks.

Subscribe| WPJ weekly newsletter with real estate news. Useful market information. Subscribe to the newsletter every week. Show list of real estate Related News.