More discouraging news for commercial real estate coming from S&P Global Market Intelligence. As for banks, what might seem bad may be good.

The organization undertook an analysis of high-volatility commercial real estate (HVCRE) loans. In Q1 2023, the "US banking industry's exposure to high-volatility commercial real estate (HVCRE) loans declined 21.8% sequentially in the first quarter to its lowest level in years."

"The aggregate HVCRE loan balance for US banks stood at $32.37 billion in the first quarter, down from $41.39 billion in the fourth quarter of 2022, and $34.29 billion in the prior-year period," the firm wrote, based on its data. "This marks the lowest balance of such loans since the first quarter of 2019. Total risk-weighted HVCRE loans as a percentage of total risk-weighted assets was 0.22% at the end of the first quarter, down from 0.28% in the 2022 fourth quarter and 0.24% a year earlier."

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