The International Monetary Fund, which has been paying close attention to the commercial real estate industry in the U.S. and around the world since the start of the pandemic, is warning that U.S. financial regulators must remain vigilant to prevent further deterioration of the sector in the U.S.
"Rising delinquencies and defaults in the sector could restrict lending and trigger a vicious cycle of tighter funding conditions, falling commercial property prices, and losses for financial intermediaries with adverse spillovers to the rest of the economy," the IMF stated in a blog post.
The agency is especially concerned about the potential effects on the nation's financial system.
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