U.S. banks, particularly the smaller ones, have been in the spotlight over the last year given their outsized loan exposure to the $20T commercial real estate market, which has been confronted with twin hurdles of financing challenges exacerbated by elevated interest rates and diminished office occupancy driven by the widespread shift to remote work. As of Q3 2023, most CRE loans outstanding (56.1%) were held by small banks with less than $20B in assets, UBS pointed out in a note to clients last month.