Insurance News - NO SUCH THING AS Normal [Mortgage Banking] via Insurancenewsnet.com

For the commercial real estate and multifamily finance markets, the term "normal" doesn't really apply. Each new cycle brings its own dynamics.

As the commercial/multifamily real estate finance market climbs out of the depths of the Great Recession, some wonder what the "new nor~ maP' will look like. But for there to be a new normal would imply that there was an old normal. * With continuous changes in the supply of capital, demand for capital, space needs, construction and many other key market drivers, it seems fair to say there is no such thing as normal when it comes to commercial/multifamily real estate finance.

Background

At the beginning of the 1980s, the 10-year Treasury stood at 10.3 percent, the homeownership rate was 65.5 percent and the commercial mortgage-backed securities (CMBS) market as we know it had not yet been established.

At the beginning of the 1990s, the 10-year Treasury stood at 7.9 percent, the homeownership rate was 64.1 percent and the CMBS market accounted for less than 1 percent of the Federal Reserve Board's estimate of commercial and multifamily mortgage debt outstanding.

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