(Bloomberg) -- The White House will keep a close eye on the commercial real estate sector as financial turmoil poses another challenge to an industry that had already been struggling during the pandemic, the nominee to be the next chair of the Council for Economic Advisers said. 

“This issue is very much on the watch list,” Jared Bernstein said during his confirmation hearing before the Senate Banking Committee on Tuesday. “It’s something we’re tracking carefully.” 

The health of the commercial real estate sector has been in the spotlight in recent months, as it has been roiled by rapid rate hikes and vacancy rates amid the rise in remote and hybrid work. Regional banks, which have long dominated commercial real estate lending, may reduce risk-taking in the aftermath of multiple bank failures triggered by the collapse of Silicon Valley Bank last month.

Bernstein, who is already a CEA member and was a chief economist for Joe Biden when he was vice president, said some of the actions taken by the White House and the Federal Reserve to tame the crisis “really helped to stabilize the system” and should help ease stressors in the real estate sector. 

“But they are definitely worth keeping a close eye on and we will do so at CEA,” he said.

Biden nominated Bernstein to succeed Cecilia Rouse, who stepped down last month to return to her faculty post at Princeton University.

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