The CRE Liquidity Trap
Cross-border pullback and policy uncertainty expose hidden pricing risks.
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Commercial real estate still looks calm on paper, but beneath the surface, liquidity is evaporating and credit stress is building. Cross-border capital is retreating, risk spreads are widening, and early signs of cap rate pressure are emerging. Hotel deal volume has collapsed, CRE lenders are quietly increasing loss reserves, and refinancing walls are closing in on weaker borrowers. The United States CRE has been under pressure from elevated risk perceptions and fading cross-border capital. Canadian investors have poured nearly $80B1 into US CRE since 2020 and are reportedly pausing activity.
The repricing hasn’t shown up in the comps yet, but the next wave of CRE stress is already in motion.