Tag Archives: commercial real estate lenders


Fourth Quarter Sees Growth in Bank-Held Commercial Real Estate Lending

new Jason stats graphic - June 2015Commercial real estate lenders comprised of U.S. banks and savings and loans increased their investment in both nationwide and Philadelphia commercial real estate by 3.1 percent in the fourth quarter of 2015, according to a news report from the CoStar Group.

The report, provided by the Philadelphia commercial real estate brokerage firm of Wolf Commercial Real Estate – a leading Philadelphia commercial real estate broker in the areas of Philly office space, Philly retail space and other Philadelphia commercial properties — showed the increase followed a jump of 2.7 percent in the third quarter.

When looking at national and Philadelphia commercial real estate listings, the total amount of CRE loans was $1.85 trillion in October, November and December 2015. This tops the $1.62 trillion that was recorded at the apex of CRE markets at the end of the second quarter in June 2007.

Among the fastest-growing categories were multifamily loans, up 4.6 percent from the end of the third quarter to a year-end total of $344 billion and non-residential commercial real estate lending loans, up 3.6 percent to a December 31 figure of $733 billion. Another top performer was the category of construction and development loans that swelled 3.3 percent to $275 billion.

More positive news could be seen in the asset quality category of CRE loans being held on bank and S&L books as delinquent balances fell for the 22nd-straight quarter. In real dollars, that equated to a drop of 5.5 percent and a sum of bad loans of $19.8 billion. This compares to a June 2007 delinquent loan amount of $27.6 billion.

The news also was on the bright side for the industry-wide volume of foreclosed properties being carried on financial ledgers. This fourth quarter total was down 12.2 percent from the third quarter to $8.3 billion. The June 2007 figure, for comparison, was $2.5 billion.

Smiles also could be seen on the faces of those dealing with repossessed properties in the CRE lending field. Despite the industry in general experiencing a small loss in the third quarter, the overall total for the year showed a gain of $215.7 million.

Of the nearly 6,300 FDIC-backed banks and S&Ls reporting financial results at the end of the third quarter of 2015, nearly 60 percent (58.9 percent) reported higher earnings than the comparable quarter in 2014. While still positive, the figure is slightly down when stacked up against the figures from the 2013-2014 comparison.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) Leor Hemo (leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker with expertise in Philly office space and Philly retail space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or Philly retail space with the Philadelphia commercial properties that best meets their needs.

As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space or Philly retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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U.S. Bankers Ready to Slow Commercial Real Estate Lending If Needed

new Jason stats graphic - June 2015In response to the FDIC’s “stark warning” for commercial real estate lenders to maintain prudent risk-management practices, U.S. banker say they will keep a close eye on CRE loan portfolios and will slow the pace of commercial real estate lending if necessary, according to a news report from the CoStar Group.

Commercial real estate lending at U.S. banks climbed steadily through the third quarter 2015 to a total of $1.8 trillion in outstanding CRE loans, outpacing by about $170 billion the previous peak set at the end of the second quarter 2007, the report said.

U.S. banking statistics also indicate that underwriting standards for CRE loans have eased during the past three years to a level that prompted last month’s FDIC warning in which the federal banking regulators said they would intensify oversight of commercial real estate lending practices in 2016, CoStar said.  The FDIC has not issued a warning regarding CRE lending since 2005.

One CRE lender agreed with the FDIC, telling analysts “the market is a little hot in certain areas,” CoStar reported.  KeyCorp’s Corporate Bank plans to slow CRE lending growth and adjust its housing forecast, telling the analysts KeyCorp would be involved in less construction loan activity.

Despite KeyCorp’s standpoint, other commercial real estate lenders are not yet ready to bow out of the market, citing strong CRE market fundamentals and pricing.

First Financial Bancorp told analysts the market so far has been “pretty strong and healthy,” adding that although some markets are admittedly soft, First Financial focuses on multifamily, health care and build-to-suit office, according to the news report.

BankUnited told analysts it was too soon to determine where to accelerate in the market and where to pull back, but that the company would be watching closely and would react as conditions warrant.  The bank said it had no intention “of eliminating one market and emphasizing another in its entirety,” CoStar reported.

BankUnited also said the FDIC warning didn’t consider the differentiation in CRE property types and markets, but looked at commercial real estate as a single category, the news report said.  The bank said federal regulators clearly are nervous about the more speculative areas of the market, CoStar noted.

U.S. bankers must manage where they are lending, what property types are covered, and the underwriting practices, CoStar explained in the report, adding that in that regard, commercial real estate lenders all plan to be more selective this year.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) Leor Hemo (leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker with expertise in Philly office space and Philly retail space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate brokerage firm that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or Philly retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space or Philly retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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Commercial Real Estate Lenders Warned to Avoid Risky Practices

new Jason stats graphic - June 2015Federal banking agencies are urging commercial real estate lenders to maintain prudent risk-management practices, warning that they will intensify oversight of commercial real estate lending practices in 2016.

In a statement seen as a “stark warning” to commercial real estate lenders, the federal agencies noted that many commercial real estate asset and lending markets have experienced substantial growth, increased competitive pressures, escalating commercial real estate concentrations in banks, and a lessening of commercial real estate underwriting standards, according to a new report from the CoStar Group.

The agencies specifically called attention to the higher concentration levels of commercial real estate loans at many banks as a result of the reassuring trends in asset-quality metrics, CoStar said.

This has caused competitive pressures to rise and commercial real estate underwriting standards to lessen, including less-restrictive loan covenants, extended maturities, longer interest-only payment periods, and limited guarantor requirements, CoStar noted in the news report.

The agencies also noted concern about specific commercial real estate risk management practices at some institutions, including an increase in the number of underwriting policy exceptions and inadequate monitoring of market conditions to properly assess risks linked to the concentrations.

The agencies reinforced existing guidelines for commercial real estate risk management, urging  institutions to preserve underwriting discipline and perform risk-management practices “to identify, measure, monitor, and manage the risks arising from CRE lending,” according to the news report.   The agencies also advised lenders to adhere to risk-management practices and maintain capital that is appropriate to the level and nature of their commercial real estate concentration risk, CoStar reported.

In 2016, the banking agencies said they would review commercial real estate lending activities, paying particular attention to banks that have undergone recent significant growth in commercial real estate lending, or institutions whose lending strategies include plans to substantially increase commercial real estate lending activities.  Institutions that operate in markets or loan segments with increasing growth or risk fundamentals also will come under closer scrutiny, according to the CoStar news report.

The statement noted that banks found to have deficient commercial real estate risk management practices and capital strategies may be required to “develop a plan to identify, measure, monitor, and manage CRE concentrations, to reduce risk tolerances in their commercial real estate underwriting standards or to raise additional capital to mitigate the risk associated with their CRE strategies or exposures,” CoStar  reported.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak with Jason Wolf (jason.wolf@wolfcre.com) Leor Hemo (leor.hemo@wolfcre.com) or Lee Fein (lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a leading Philadelphia commercial real estate brokerage firm with expertise in Philly office space and Philly retail space.

Wolf Commercial Real Estate is a Philadelphia commercial real estate broker that provides a full range of Philadelphia commercial real estate listings and services, marketing commercial offices, medical properties, industrial properties, land properties, retail buildings and other Philadelphia commercial properties for buyers, tenants, investors and sellers.

Wolf Commercial Real Estate, a Philadelphia commercial real estate broker that specializes in Philadelphia commercial real estate listings, provides unparalleled expertise in matching companies and individuals seeking new Philly office space or Philly retail space with the Philadelphia commercial properties that best meets their needs.  As experts in Philadelphia commercial real estate listings and services, the team at our Philadelphia commercial real estate brokerage firm provides ongoing detailed information about Philadelphia commercial properties to our clients and prospects to help them achieve their real estate goals.  If you are looking for Philly office space or Philly retail space for sale or lease, Wolf Commercial Real Estate is the Philadelphia commercial real estate broker you need — a strategic partner who is fully invested in your long-term growth and success.

Please visit our websites for a full listing of South Jersey and Philadelphia commercial properties for lease or sale through our Philadelphia commercial real estate brokerage firm.

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