Commercial real estate lenders were much more active in 2010 than 2009, according to exclusive research conducted by National Real Estate Investor. Refinancing activity rose significantly as did financing for new acquisitions, renovation and redevelopment. However, loan activity for new development was flat due to the lingering effects of the recession. Absorption, a measure of demand, will need to rise significantly before lenders will become comfortable financing new development projects.
The property sector with the best near-term prospects for financing and development is the apartment sector due to favorable demographics and growing demand. But lenders emphasize the real estate fundamentals of a given submarket are critical to determining whether new development is warranted.
Lender respondents are most likely to be financial intermediaries or direct lenders. The largest percentage finance housing properties, while 88% finance housing properties, 75% finance office properties and 73% finance retail properties.
Which of the following best describes your organization? (Asked of lenders)