Commercial Real Estate Loans – Supply & Demand: Banks are slowly ramping up their commercial real estate lending according to the Federal Reserve’s quarterly Senior Loan Officer Opinion Survey on Bank Lending Practices. In the newly released January survey, 1.8 percent of respondents said their banks eased standards for CRE loans in the prior three months, the fourth consecutive quarter of easing. Nearly 34 percent reported stronger demand for CRE loans from creditworthy borrowers. While demand for commercial real estate loans has returned to pre-recession levels, banks are loosening standards at a cautious pace. The 30-day delinquency level for bank CRE loans has declined from 8.76 percent in the second quarter of 2010 to a still-elevated 6.69 percent in the third quarter of 2011. Overall, capital availability is increasing for commercial real estate across most sources of debt and equity, which will fuel increasing transaction volume in 2012.
Source: Weekly Market Insight, Robert Bach, Senior Vice President, Chief Economist, Grubb & Ellis, has 30 years of professional experience in real estate market research, consulting and city planning.