A shudder of panic went through the regional banking sector over the weekend and into Monday as a second bank, Signature Bank, was seized by regulators. It marked the third-largest U.S. bank failure in history, coming two days after the second-largest, Silicon Valley Bank on Friday.

SVB had about $2.6B of CRE loans on its books, according to regulatory filings. Signature Bank was even more active — it was the third-biggest lender to New York City commercial real estate and had nearly $36B of commercial property loans on its books at the end of 2022.

Investors seem spooked by the problems in the regional banking sector. The SPDR S&P Regional Banking index was down nearly 11% early Monday afternoon, and some banks are seeing heavy losses: First Republic Bank stock dropped nearly 70% on Monday morning, Pacwest Bancorp was down nearly 30%, Keycorp was off almost 25%, and Zions Bancorporation dropped more than 17%.

“The market is likely to remain very cautious despite regulators stepping in,” Marija Veitmane, senior multi-asset strategist at State Street Global Markets, told Yahoo Finance.

Any disruption in regional banking will impact real estate lending, since as interest rates have risen in recent quarters, regional and community banks  — generally, those with assets less than $100M — have stepped up to take a larger market share of commercial real estate loans than in previous years.

Capital markets experts told Bisnow in January that smaller banks were able to do more CRE business toward the end of 2022 as large institutions pulled back because they are subject to less regulatory scrutiny. That may soon be changing, as President Joe Biden called on Congress to tighten bank regulations Monday morning as he announced emergency backstop measures for depositors at SVB and Signature.