Banks are sitting on as much as $160 billion in losses on loans to the commercial real estate market as they brace for a wave of defaults from landlords in the year ahead, according to a report. There is currently a 10% to 20% default rate on commercial real estate loans, equivalent to between $80 billion and $160 billion in bank losses, researchers from Columbia, Stanford, the University of Southern California and Northwestern wrote in a working paper published by the National Bureau of Economic Research this month. The grim findings support an earlier calculation by Morgan Stanley that showed lenders would need to negotiate more…
