Deutsche Pfandbriefbank and Co.: Financial institutions have a serious problem with commercial real estate. European banks are facing an ever-increasing problem in view of falling real estate prices.
They have granted loans worth around 1.4 trillion euros to the crisis-ridden industry. Low office utilization in the USA is causing banks to tremble. In the U.S., higher interest rates, refinancing problems and lower office occupancy have also hit the commercialReal estate sector hard and fueled fears of a global downturn. How badly the banks are affected depends on how badly the market collapses.