The depth and duration of the commercial real estate (CRE) price decline that began in 2022 hinges heavily on macro factors, such as the health of the economy, the path of interest rates and bank lending standards, and the demand destruction caused by hybrid and remote work. These drivers alongside aggregated loan-level data like the loan-to-value ratio, as well as the property’s location and quality, are critical to determining the scope of bank losses.
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