Fed Flags Rising Delinquencies in Commercial Real Estate Loans

Banks are preparing for further losses as delinquencies in loans tied to office space continue to rise, according to the Federal Reserve.

The Fed said Friday that the rate of late payments on some commercial real estate loans had surged to above its pre-pandemic level. Officials at the central bank are focused on “improving the speed, force and agility of supervision, as appropriate,” the Fed said in a semiannual report.

Michael Barr, vice chair for supervision at the US Federal Reserve

Photographer: Graeme Sloan/Bloomberg

US bank regulators, including the Fed, have been sounding alarms about the commercial real estate market. About a year ago, officials asked lenders to work with creditworthy borrowers ...