Commercial real estate is the next shoe to drop for regional banks and the stock market

• Commercial real estate is probably the next pain point for regional banks and the stock market, according to BofA.
• The bank noted that US regional banks account for 68% of all commercial real estate loans.
• A combination of low occupancy and a wave of refinancing at higher interest rates could spell trouble for banks, stocks, and the broader economy.

The next domino to fall in the ongoing banking crisis could be commercial real estate loans, according to a Friday note from Bank of America.

A potential credit crunch in the sector, sparked by a wave of upcoming refinancings of commercial real estate loans at much higher interest rates than in the past, could send stocks spiraling and the economy into a recession.