In CRE lending, it has been depository banks mentioned as pulling back, worried about falling value of properties that would affect loan values that could undercut the bank's assets and create regulatory danger.

According to Trepp, though, this is more than an issue for just banks. The major mortgage REITs saw their collective loan portfolios shrink by nearly 11% over the past year, as most had sharply curtailed lending and turned their sights to their problem loans, it found. The reason is that mortgage REITs typically fund relatively short-term loans with floating coupons that are designed to either improve or stabilize commercial properties, Trepp explained. "They and, more specifically, their borrowers were walloped as interest rates spiked and commercial property markets turned against them."

REITs aren't regulated the way depository institutions are, but there seems to be a market equivalent of regulation. Trepp has tracked 14 different REITs that originate loans. In 2021, that group had made $49.83 billion in loans. By 2022, the total was down to $30.9 billion. The annual total fell to $4.69 billion in 2023.

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