New Multiple Lending Options Open Up For Commercial Real Estate Properties
All of us at NBI Properties wanted to stand up and applaud when we learned that banks are finally loosening their purse strings and demonstrating a willingness to ease lending standards for commercial real estate. We think the news is long overdue, but regardless it’s great that banks are responding to stronger demands for borrowing during the past three months and lenders are now stepping up to the plate.
“It’s a clear sign that lenders are now willing to grow their commercial real estate portfolios just as they have been doing in other areas,” said Jayme Nabors, co-owner of NBI Properties.
Overall, the banking sector has dramatically improved its liquidity position in the past several years and many large banks have more than doubled their holdings of cash and securities since 2009. According to Federal Reserve System chairman Ben Bernanke, the credit quality of assets at large banks is improving as well, although positive changes have depended on the types of loans available. According to reports, delinquency rates on loan portfolios at large banks have declined from their peaks, but delinquencies on commercial and industrial loans and consumer loans have fallen to the bottom of their historical ranges.
Bernanke added that delinquencies on loans backed by commercial or residential real estate have declined moderately and currently remain elevated.
“The market has been fickle and uncertain for several years, so this news offers hope to investors and consumers,” said Nabors. “It’s another sign of recovery that credit conditions throughout the country are getting better and that many businesses and consumers are finding it easier to get approval for loans.”
Financial experts seem to agree that the abundance of competitive lending sources combined with attractive, low interest rates has created an ideal environment for financing commercial real estate.
Nabors noted that on the Emerald Coast, his company has seen more lenders offering loans and programs for hospitality, construction, retail, and special use properties.
“It’s exciting that banks are starting to catch up with borrowing demand,” he said. “We’re working with many clients who are seizing this opportunity to invest in commercial real estate.”