There are many reasons to feel positive about the state of commercial real estate finance. CRE loan originations for the second quarter of 2012 were up 25 percent over the same period in 2011, according to the Mortgage Bankers Association. And a growing number of lenders are looking beyond gateway cities and Class A assets when making loans, says Constantine Korologos, managing director with Deloitte Financial Advisory Services in New York.
Several factors are combining to boost lenders’ confidence. A stabilizing, if sluggish, economy and low mortgage rates, due to a capital flight from Europe, are raising the appeal of financing commercial real estate, says Jamie Woodwell, the MBA’s vice president of commercial real estate research. But improving property fundamentals and rising values in most property types are the key factors making the difference to lenders “all along the capital stack,” says Bill Hughes, managing director of Marcus & Millichap Capital Corp. Combined A and B loans can push loan-to-value ratios as high as 85 percent for the right property and an established sponsor, he adds.
Read more...Financing Loosens Up via RealtorMag
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