Why do banks delay resolving distressed loans, even when they are well capitalized? I study this question in the U.S. commercial real estate market following the pandemic. I develop a dynamic model in which resolving distressed loans generates public information about collateral values. Banks have an incentive to wait for information from other banks’ resolutions, but realized peer resolutions encourage subsequent resolution by reducing valuation uncertainty. Using loan-level data constructed from land records, I find that more early peer resolutions are associated with a lower probability of subsequent loan extension. Consistent with the information mechanism, this relationship is stronger when transaction prices are publicly disclosed. These findings identify an informational channel through which banks’ resolution decisions interact: waiting for others to generate information slows information production and can prolong both distress and valuation uncertainty.

This study investigates how risks in other financial markets affect returns in CRE. I introduce a new approach that blends traditional analysis with a technique to adjust for price delays caused by slow market activity. The research finds that factors related to bonds are better predictors of CRE returns than those related to stocks. This suggests that CRE might protect against certain financial risks. The study also shows that CRE returns are influenced by economic cycles and credit availability. Interestingly, CREs with higher exposure to risks in the financial sector tend to have lower returns, indicating that CRE may help reduce certain financial system risks.