Throughout 2023, there were a lot of tough headlines about commercial real estate: Vacant offices. Falling apartment rents. Fire-sale prices. So why did banks’ loans to that market grow this year?

So-called CRE loans at banks are up over 3% over last year, versus a more than 1% decline in general commercial-and-industrial corporate lending, according to weekly Federal Reserve data through Dec. 6. CRE loans’ rise was just shy of the increase in loans to consumers. And within CRE, construction-and-land development lending was up over 9%, growing almost as much as credit-card loans.