JPMorgan and Wells Fargo quietly tighten lending standards..
Vacancy rates in major cities remain near record highs..
Commercial property values continue sliding..
Many wonder if this lending pullback is being coordinated to force distressed sales into the hands of select buyers..
A federal judge ruled on March 30, 2026, that JPMorgan must face a lawsuit from Wells Fargo over a defaulted $481M CRE loan. Wells alleges JPM ignored “red flags” before selling the loan to investors.
Federal regulators have warned banks to stop “extending and pretending” on impaired mortgages. An estimated $2 trillion in U.S. CRE debt is maturing through 2026, requiring refinancing at much higher rates.
National office vacancy has plateaued at 17.8%–20.2%. While cities like San Francisco show signs of bottoming out, Austin, Texas remains at a record high of 26.2%.
- “The national office vacancy rate was 17.8% in March, following a decrease of 210 basis points (bps) year-over-year (Y-o-Y).
- The national office listing rate averaged $32.80 per square foot last month, which was nearly 2% lower than values recorded in March 2025.
- The office supply pipeline remained modest last month with nearly 29 million square feet of office space currently under construction.
- With a little more than $1.8 billion in deals closed since the start of the year, Manhattan, N.Y., topped the list for sales. It was followed by Miami ($892 million) and Dallas ($859 million).
- Miami and Manhattan, N.Y., averaged the lowest vacancy ratesin March among the eight top U.S. office markets where vacancy was below the national average.
- Western and Northeastern markets had most of the leasing rates above the national average, while Midwestern and Southern markets claimed some of the most affordable office asking rates in March.
- Boston; Manhattan, N.Y.; Dallas; and Los Angeles had the most active construction pipelines and were the only markets with more than 2 million square feet of new office space in development last month.”
https://www.commercialcafe.com/blog/national-office-report/
A significant 44% of all office loans are now estimated to be in negative equity (property value below outstanding debt) due to the hybrid work shift and high interest rates.
https://www.jpmorgan.com/insights/real-estate/commercial-real-estate/commercial-real-estate-trends
JPMorgan’s CEO DImon has said that the credit downturn will be worse than people think.