Ever since four regional banks holding a combined $532 billion in assets—headlined by Silicon Valley Bank—failed in March 2023, regional banks have been under scrutiny from regulators. And given the commercial real estate (CRE) industry’s issues, a key focus has been on banks with the most exposure to the volatile sector.
In an upcoming white paper seen exclusively by Fortune, RXR CEO Scott Rechler described how regional banks will face a “slow-moving train wreck” as waves of commercial real estate loans mature over the next few years. Rechler has faith that many commercial real estate owners, operators, and lenders will figure out a way to overcome the challenges facing them, but he’s more skeptical about regional banks. “I think there's going to be…500 or more fewer banks in the U.S. over the next two years,” he said. “I'm not saying they're all going to fail, but they're going to be forced into consolidation if they don't fail.”
