Community banks are big commercial real-estate lenders. But they say their loans are to sturdy local businesses, not those facing vacant office space.According to The New York Times, community banks are facing a misconception about their role in the commercial real estate market. While they are indeed big lenders in this market, they argue that their loans are primarily to stable local businesses, not to owners of vacant office spaces. This distinction is important, as investors are concerned about the potential risks these banks may face in the current economic climate. Community banks take pride in their role as supporters of small businesses in their neighborhoods, such as dry cleaners, dentists, and sandwich shops. However, they also feel anxious about being grouped together with larger lenders who are facing difficulties with half-empty office buildings in major cities like Manhattan, San Francisco, and Chicago. In reality, the majority of commercial building loans made by community banks are for smaller buildings that are fully leased, such as those housing local doctors and businesses. While there are some concerns about the financial pressure on apartment building landlords if interest rates remain high, the number of missed payments on these types of mortgages has not significantly increased. John Buran, the CEO of Flushing Financial, which operates branches as Flushing Bank in New York City and Long Island, emphasizes that their loans are performing well and that most community banks do not have significant exposure to the struggling office market. 

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