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A firestorm among the banking sector, including the failures of Silicon Valley Bank and New York’s Signature and infusions of capital into First Republic Bank and Credit Suisse, has real estate investors scrambling to figure out what this all means for accessing debt.

“Our house view is that there is certainly a more constrained credit market, at least temporarily,” says Michael Riccio, senior managing director and co-head of national production at CBRE Capital Markets. “However, it is still fairly early, and every lender is trying to determine how they are going to react to this change in the market,” he says.

Some real estate pros credit the federal government for moving quickly to prevent a bigger systemic crisis and returning some sense of stability, albeit it precariously. A joint statement issued by the Treasury Department, Federal Reserve and FDIC said that it would fully protect depositors of both Silicon Valley Bank and Signature Bank. “Our view is that it may be contained because of what the Federal government has done. So, we’re thinking that there might not be widespread collateral damage,” adds Riccio.

Yet the turmoil is already reducing liquidity in the commercial real estate capital markets. Lenders are expected to err on the side of caution with more conservative underwriting. That pullback is already evident in the past week with spreads that have widened across most lender groups—CMBS, debt funds and banks. And CMBS issuance has ground to a halt due to the volatility in the market.

“After the closures of SVB and Signature Bank, it seems almost inevitable that CRE credit spreads will increase and lending liquidity will decrease over the short run,” says JP Verma, senior product director, banking solutions at Trepp. “However, there are still several questions that don’t have an easy or immediate answer, such as whether lending liquidity is drying up, how lending spreads are reacting, and how long this fallout will last.”