Bankers Give 6 Reasons To Shop for a CRE Loan Now; And 2 Reasons Not To

posted in: Commercial Real Estate | 0

Third Quarter Bank Earnings Reports Clear Up Picture of Commercial Real Estate Conditions

October 24, 2012
The second week after the end of quarter is always a revealing time for commercial real estate. That’s when many of the nation’s largest bank holding companies go live to discuss their earnings, and how their CRE lending is faring. In this latest go-around, the bank executives provided the clearest picture of CRE conditions that they have in a long time.
As we do each quarter, we present the most telling statements regarding bank CRE-related activities from the presentations we heard:

• For major banks, the recession is receding further and further away in the rearview mirror.
• Provisions for loan losses are falling, which means banks have more money available to lend.
• The disposition values of foreclosed assets are increasing, so banks plan to make more property available for sale.
• Many banks have cleared through their distressed assets and are ready to start growing again.
• They see demand in the marketplace increasing.
• There is pressure on pricing as competition for loans heats up.
• However, lenders view CRE as still inherently risky, but federal banking policies are mitigating the risks, and,
• Conditions will continue to get better, as long as we don’t go over the ‘fiscal cliff.’

We’ll take you through each point and tell you who said what.