Asset Quality
Commercial Real Estate Loans
Also known as CRE Loans
Commercial real estate (CRE) loans are credit secured by income-producing or owner-occupied commercial property — office, retail, multifamily, industrial. They are the largest asset class at many community banks and the focus of intense supervisory attention since 2023.
Formula
Schedule RC-C breaks real estate lending into categories that aggregate to CRE. Supervisors track CRE both as a dollar total and as the CRE concentration ratio — CRE loans relative to capital — which flags banks that may warrant heightened risk management.
Why it matters
CRE is where community-bank credit risk concentrates, and the post-pandemic stress in office and some retail property has made it the sector regulators watch most. A large CRE dollar book matters most when it is large relative to the bank's capital.
How to interpret
The dollar CRE figure is the input to the metric that really drives supervision — the CRE concentration ratio. Read the two together, and look at property-type mix: an office-heavy book carries different risk than one weighted to multifamily or owner-occupied space.
Thresholds
| Range | Label | Interpretation |
|---|---|---|
| Diversified, < 100% of capital | Strong | CRE well within supervisory concentration guidance. |
| Moderate | Adequate | CRE a normal share of a community-bank book. |
| Concentrated | Watch | Approaching the 300%-of-capital supervisory threshold. |
| Office-heavy / > 300% of capital | Concern | High concentration in a stressed property sector. |
Worked example
Frequently asked
What counts as a commercial real estate loan?
CRE includes loans secured by nonfarm nonresidential property, multifamily housing, and construction and land development. Owner-occupied commercial property is sometimes analyzed separately because it is repaid from business operations rather than property income.
Why is CRE under so much scrutiny?
Post-pandemic remote work hit office property values, and CRE is highly concentrated at community banks. Supervisors use the CRE concentration ratio to identify banks whose CRE exposure is large relative to capital.
Sources
- FFIEC Call Report Schedule RC-C (Loans and Lease Financing Receivables)
See CRE Loans across 4,335 US banks
BankRegReports ranks every FDIC-insured institution by CRE Loans, refreshed quarterly within 48 hours of FFIEC release.