Calling All Commercial Real Estate Lenders

Commercial real estate lending continued to be successful with life insurers, banks, GSEs and other alternative providers such as REITs and debt securities prior to the pandemic. This activity was largely driven by strong commercial real estate and economic fundamentals and remained robust until early 2020 when the COVID-19 pandemic erupted.

According to a CBRE index, commercial real estate loan closings declined nearly 21% year over year in Q2 2020, driven by the temporary, pandemic-induced freeze in credit and transaction markets between mid-March and early April.

At that time, the industry’s sources of credit began to shift sharply as additional credit groups entered the room.

In the second quarter of 2020, banks recorded more than 70% of the loan accruals in the previous quarter, according to CBRE. In the third quarter, banks continued to lead the non-agency lending groups, capturing 39% of lending deals. In Q3 2020, life insurance companies accounted for 22.5% of non-agency lending, and alternative lenders, including REITs, financial firms, and debt, accounted for 34% of lending.

In addition to these changes, the underwriting criteria for lenders have become more conservative, which, according to Marcus & Millichap, has resulted in fewer options for some borrowers.

In addition, the FHFA recently set new multi-family loan caps for Fannie Mae and Freddie Mac for 2021, which could potentially pose challenges for large market rate deals and, in turn, benefit small balance markets.

Faced with numerous significant challenges in the marketplace, commercial real estate lenders have continued to exercise caution and constantly adjust their strategies.

Valley Bank’s Vince Chillura suggests as lender: “Assuming we don’t see significant changes in certain niches, the challenges for us as lenders are the same as ever. Our success depends on making smart decisions and working with solid borrowers who have experience and knowledge in their industry. “

Now, after nearly a year of uncertainty, commercial real estate lending markets are picking up speed as business begins to flow. Although a slow recovery is expected, the credit market continues to show signs of hope as the number of credit applications continues to grow.

This movement within the industry is largely due to the tireless efforts of the talented professionals in the industry. With this in mind, GlobeSt. The Real Estate Forum aims to put CRE capital’s lenders in the spotlight.

For GlobeSt. Not only will we feature individual pioneers who made an impact through their efforts, but also lender organizations and the teams that are vital to the industry.

Be it through their contributions to the industry, the great successes they have had in closing deals, or the innovations and best practices they have introduced into the business Lender influencer in the financial industry.

The nomination deadline is March 5th, 2021. To apply, click here.

You can access the series’ FAQ page here.