The US commercial real estate (CRE) loan market totaled approximately $4.8 trillion in 2025, marked by significant segmentation by property type, lender category, and geography. This report dives into detailed segmentation and risk analysis with visual pie charts to make these insights more digestible.
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Property Type and Market Dynamics The CRE loan portfolio is heavily segmented by property type, with the following distribution: Office loans are the primary locus of stress in the market, particularly within the CMBS (Commercial Mortgage-Backed Securities) segment, showing elevated default rates around 12%, driven by high vacancy and weakening property values. Multifamily and retail properties, while more resilient, face increasing delinquencies amid refinancing pressure from rising interest rates. CRE Loan Portfolio by Property Type (2025):
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Bank and Nonbank Loan Share Large and medium-sized banks dominate CRE lending, holding roughly 65% combined market share, followed by small banks (20%), credit unions (5%), and nonbank lenders including life companies, CMBS conduits, and private debt funds (10%). Credit unions are growing rapidly in CRE exposure, doubling their growth rate compared to banks in early 2025 but still maintaining a smaller overall market share. CRE Loan Market Share by Lender Type (2025):
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Refinancing Wall and Systemic Risk The 2025 refinancing wall looms large with nearly $957 billion of CRE loans maturing this year, about 20% of the total outstanding. Office loans represent nearly one-quarter of these maturities, underscoring risk concentration. Loans originated before 2023 at historically low rates face refinancing challenges amid higher current interest rates, squeezing cash flows and lender flexibility. CRE Loan Maturities 2025 by Property Type:
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Regional Disparities CRE loan distribution shows pronounced geographic concentration in leading states with large urban and economic hubs: • California: 15% • Texas: 10% • New York: 10% • Florida: 9% • Illinois: 6% • New Jersey: 5% • Pennsylvania & Georgia: 4% each • Ohio & North Carolina: 3% each Some states face idiosyncratic risk tied to dominant asset types, e.g., hotels in Florida and offices in New York. Top 10 States by CRE Loan Balance Share (2025):
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Lender Risk Exposure CMBS loans show significantly higher default rates at 7.29%, compared to bank portfolios at 1.57%, and credit unions at 0.9%. CMBS risk is magnified in office properties at 12% default. Banks, especially community and regional institutions, face asset-specific risk but generally have more stable risk profiles owing to collateral management practices. Credit unions maintain lower default rates thanks to conservative underwriting and smaller exposures. CRE Default Rates by Lender Type (2025):
Conclusion The US CRE loan market in 2025 is large and complex, with varied risks depending on property type, lender category, and regional exposure. The refinancing wall and stressed office market segments pose systemic challenges, especially for CMBS and certain bank portfolios, while credit unions and multifamily segments provide relative stability. Investors and risk managers must deeply understand segment-specific trends and geographic exposures to navigate this dynamic environment successfully.
References References • https://www.altusgroup.com/insights/us-cre-transactions/ • https://www.jpmorgan.com/insights/real-estate/commercial-real-estate/commercial-real-estate-trends • https://www.oldrepublictitle.com/blog/commercial-snapshot-q3-2025/ • https://fred.stlouisfed.org/series/CREACBM027NBOG • https://www.cbre.com/press-releases/commercial-real-estate-lending-activity-increases-in-q1-2025 • https://www.stlouisfed.org/on-the-economy/2025/may/banking-analytics-commercial-real-estate-loan-growth-slows-11-year-low • https://www.fdic.gov/analysis/2025-risk-review.pdf • https://tradingeconomics.com/united-states/real-estate-loans-commercial-real-estate-loans-construction-and-land-development-loans-all-commercial-banks-fed-data.html • https://www.deloitte.com/us/en/insights/industry/financial-services/commercial-real-estate-outlook.html • https://agorareal.com/blog/commercial-real-estate-market-outlook/