Concerns about U.S. commercial real estate lending are everywhere. BlackRock thinks that borrowing costs will be 5.5% in the long term. Banks keep tightening lending standards, increasing the difficulty for many to get needed financing.
And recently the Financial Stability Oversight Council — a collection of all the major federal bank regulators — created an "analytic framework" for nonbank financial security risks. Not surprising, said some sources to GlobeSt.com, because nonbank lenders have been taking over for where banks have fallen short.
But that leaves the question of what exactly is happening with the banks. The immediate answers would seem to be the standard ones. Overindulgence in long-term bond assets with very low yields and, so, very low values. Books of commercial real estate loans of growing questionable value and properties don't get refinanced. Concerns about regulators creating pressure to reduce lending to help cool the economy.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
