@JSDorn so the FFR is the driving thing the fed moves. It's how much a bank gets paid to put excess funds with them. That means for a bank to borrow money from another bank, they have to exceed that rate ( since it has more risk ). This means that rates of new loans are then higher because it is more expensive to get liquidity. But that also means less loans are written because prices are high .. and many regional banks need to write loans as their main business.

When the rates are low, it means liqudity is cheap, so a bank can sit on non-performing loans and hope they start performing. As liquidity becomes harder to get they need to start making hard choices, CRE is one where the loan amounts are high, so you can in theory get a lot of liquidity with a smaller amount of paperwork.

What is going to happen at some point is people are going to say "this CRE thing isn't going to get better any time soon, I need to cut my losses"