Competition in commercial real estate lending is re-emerging on the US west coast, possibly marking an early sign that the financing drought that has wreaked havoc with the sector is easing, Citigroup Inc analysts said on Friday. The lack of financing has been a chief cause of falling values on office, retail and apartment buildings since 2007, forcing sales at depressed prices.
To avoid that, lenders have been busy extending or renegotiating loans, aiming to mitigate investor losses. Tight credit has exacerbated the effect of the US recession, which has increased vacancies and reduced rents to a point where revenue is falling short of debt payments. But recent signs of "aggressive" competition to fund office properties, including from insurance companies and foreign banks, mean borrowers could find it tougher to seek breaks on existing loans, the analysts, led by Darrell Wheeler, said in a research note.
Comments
Comments are closed.