Tag Archives: commercial real estate lending


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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Bank Growth Spurred by Commercial Real Estate Lending

new Jason stats graphic - June 2015Commercial real estate lending provided the strongest impetus for bank growth in the third quarter 2015, according to a CoStar News report.

Commercial real estate loans and securities contributed $46.5 billion to the growth in FDIC-insured banks and savings and loans in the third quarter 2015 from mid-year to $15.89 trillion, CoStar said in the report.

CoStar noted that the largest gains in commercial real estate lending came from nonfarm nonresidential real estate loans, which were up $23.8 billion, or 2% for the quarter.  Multifamily residential real estate loans increased $13.9 billion, or 4.4%, and real estate construction and development loans were up $10.3 billion, or 4%, the report said.

Despite the positive quarterly results, FDIC chairman Martin J. Gruenberg urged banks to pay attention to signs of growing interest-rate risk and credit risk, noting that the industry was in the “phase of the credit cycle when lending decisions are made that could lead to future losses.”

“Timely attention by banks to address these growing risks will benefit banks and contribute to the sustainability of the current economic expansion.” Gruenberg said.

Investment securities at banks rose by $25.9 billion, or 0.8%, with most of the growth coming from an increase in mortgage-backed securities, which rose $31.2 billion, or 1.7%, CoStar said in the report.

Total commercial real estate loans at all commercial banks and savings institutions now stands at $1.8 trillion, in comparison to a total of $1.63 trillion in commercial real estate loans at the mid-year 2007 peak of the commercial real estate market, according to the report.

Delinquent commercial real estate loans total dropped for the 21st consecutive quarter.  Total delinquent commercial real estate loan balances stood at $20.96 billion, down 6.6% , the news report said.

Total dollar volume of foreclosed commercial real estate properties held by banks was $9.45 billion at third quarter 2015 end, a decline of 10% from the second quarter, CoStar said, noting that 55% of the $9.45 billion was on construction and development properties.

Aggregate net income for FDIC-insured institutions stood at $40.4 billion at the end of September 2015, a drop from the $43 billion reported at the end of June 2015, CoStar said.

Nearly 60 percent (58.9%) of the 6,270 insured institutions reporting third quarter financial results noted year-over-year growth in quarterly earnings, slightly less than in the previous quarter.

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 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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Commercial Real Estate Lending Soars at U.S. Banks

magnifying glassCommercial real estate lending has ballooned at U.S. banks with more than $100 billion in new loans added to the books in the past four quarters, up 6.6% to a total of more than $1.65 trillion (excluding farming), according to a CoStar Group report based on the newest FDIC numbers.

The increase in commercial real estate lending bodes well for new construction projects getting underway nationwide, including those that will bring new Philly office space and Philly retail space to Philadelphia.

The fastest-growing category in commercial real estate lending remained the multifamily lending sector, which rose 14.5% during the past four quarters to a total of $289 billion, Costar said.  Banks are again favoring construction and development lending with activity in this sector up 11.9% in the past four quarters to a total of $230 billion, CoStar said.

Other nonresidential commercial real estate lending increased 6% to $654.5 billion, CoStar reported.  The only other category the FDIC breaks out in bank lending is owner/occupied properties, which remained mostly flat, rising less than one percent to $478.7 billion and reflecting banks’ wariness regarding small business lending, CoStar said.

CoStar also noted that the quality of commercial real estate loans currently on the books continues to strengthen with the amount of past due loans held by banks shrinking to less than $30 billion at the end of the third quarter 2014, a drop of 6.6% in the past year and down approximately $119 billion from the height of the Great Recession five years ago when banks held almost $149 billion in delinquent commercial real estate loans.

As the quality of loans of loans continues to improve, more banks are willing to approve commercial real estate lending for major projects such as the Philadelphia office space and Philadelphia retail space construction projects currently underway in Center City Philadelphia.

CoStar also reported, the amount of charge-offs on real estate loans secured by nonfarm nonresidential properties declined 61.1 percent or $360 million.

The number of foreclosed properties held by banks dropped dramatically again, down 22 percent from a year ago to $13.1 billion.  The drop in the past year — $3.78 billion — represents a rate twice as fast as the four previous years combined.

For more information about Philly office space, Philly retail space or other Philadelphia commercial properties, please call 215-799-6900 to speak to Jason Wolf (215-588-8800-cell; jason.wolf@wolfcre.com), Leor Hemo (215-514-1750-cell; leor.hemo@wolfcre.com) or Lee Fein (215-206-5580-cell; lee.fein@wolfcre.com) at Wolf Commercial Real Estate, a premier Philadelphia commercial real estate broker with extensive expertise in Philadelphia office space and Philadelphia 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, 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 Philadelphia office space or Philadelphia 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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