Impacted Domains: Operational, Financial, Reputational
Impacted Industries: Real Estate, Banking
Date: September 1, 2025

Defaults and asset devaluation across office and multifamily CRE portfolios are threatening institutional solvency and the broader health of the banking sector.

So What:
Without proactive restructuring, banks face mounting write-downs, capital adequacy failures, investor confidence collapse, and heightened regulatory intervention. Institutions with concentrated CRE exposure or weak monitoring frameworks are at the highest risk of cascading financial impact.

Risk Value:
$40M–$680M for mid-size institutions, depending on loan concentration, geography, and refinancing stress.

Mitigation Cost:
$3.5M–$39M for mid-size firms to strengthen exposure tracking, risk scoring, and capital planning.

What to Do:

• Monitor CRE and banking exposure for refinancing stress, delinquency signals, and valuation shifts.

• Deploy early-warning systems for loan maturities to anticipate defaults and renegotiation needs.

• Implement real-time risk scoring across portfolios to surface high-risk assets.

• Automate alerts for market changes, competitor distress, and regulatory signals.

Risk AIQ Score: 8

🔗 FDIC: 2025 Risk Review