September 21, 2016
Commercial real estate developers have found new sources of capital as a result of CMBS lending pullback. This time, it is the banks that have stepped in to fill the void.
Real Capital Analytics says 41% of financing in the U.S. during the first half of this year was derived from national and regional banks. That’s an increase of 25% from two years ago. Lending from CMBS sources declined from 30% to just 10% this year.
Market volatility, pricing pressures, and new financial regulations caused CMBS offerings to plunge. That was unfortunate timing for some CRE borrowers that are seeking to refinance CMBS loans from 2006 and 2007 that are coming due.
The increased exposure and risk to banks is being closely watched by the Fed, regulators, as well as investors, analysts and ratings agencies.
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