There are $1.5 trillion of commercial real estate loans maturing in the next three years (2023, 2024, 2025) as CRE markets face economic pressures from a high-interest rate environment, lingering reluctance by employees to return-to-the-office, and new needs for space in the post-pandemic landscape. In order to address this wave of maturing CRE debt that was financed when base interest rates where near zero, market liquidity needs to be restored and the ability to raise capital in this challenging economic environment must be preserved.

In the wake of the U.S. banking turmoil in March 2023, federal bank regulators are considering a sweeping set of proposed changes that would increase capital requirements for the nation's largest banks by as much as 20%, which could significantly affect liquidity available for commercial real estate transactions, impact asset values, and influence economic growth.

The proposed changes to large bank capital requirements would implement the final components of international banking regulations known as the Basel III “endgame.” The agencies’ proposal, if adopted, would have a long phase-in period and not impact community banks.

The dissenting votes of some regulators on the proposed rulemaking revealed rare disagreement, and Fed Chairman Jerome Powell signaled a cautious approach to consideration of any final rule as a public comment period continues.

The Treasury Department is expected to issue new rules in 2023 that will require real estate professionals to report the identities of the "beneficial owners" of companies buying real estate to the Treasury Department's Financial Crimes Enforcement Network (FinCEN). A beneficial owner refers to an individual who owns at least 25% of an entity or indirectly exercises “substantial control” over it.

The Corporate Transparency Act (CTA) authorizes the Treasury's FinCEN to collect beneficial ownership information and disclose it to authorized government authorities and financial institutions, subject to effective safeguards and controls. Enacted in January 2021, the CTA’s reporting requirements go into effect on January 1, 2024.

The Corporate Transparency Act (CTA) amended the Bank Secrecy Act to require corporations, limited liability companies, and similar entities to report certain information about their beneficial owners (the individual natural persons who ultimately own or control the companies) to FinCEN.

Due to the far-reaching scope of the CTA, there is concern about the impact it could have on many commercial residential real estate businesses that are frequent users of the LLC structure for conducting business. 

The evolving threats and crises of today's world, primarily COVID-19 and the increasing occurrences of natural disasters, has highlighted the lack of – and need for – insurance capacity and various lines of commercial insurance. Expanding coverage gaps present challenges for businesses across many industries, including real estate. A lack of adequate coverage will lead to economic uncertainty, harm stakeholders and undermine the growth of communities.

Pandemic-related coverage in various lines of commercial insurance has been withdrawn or restricted going forward. Additionally risks from natural disasters like floods, hurricanes, wildfires, hail, tornadoes, and drought cost the U.S. billions of dollars each year.

Legal cannabis-related businesses (CRBs) face the challenge of obtaining bank accounts, and commercial property owners face legal challenges of taking on CRB tenants without safe harbor protections.

Federal and state law differences on cannabis policy leave banks and real estate providers trapped between their mission to serve lawful businesses in local communities — and the threat of federal enforcement action.