Banks Optimistic About CRE Business

Over 85% of banks are expecting to generate commercial real estate loan volume for 2003 equal or greater to their 2002 volume, according to a survey of senior loan officers at 119 banks conducted by Bridger Commercial Funding.The San Francisco-based capital markets intermediary said that 51% of banks are reporting "somewhat tighter" underwriting and 37% are reporting unchanged standards. On the borrower side too, demand remains reasonably strong, Bridger reports. About 75% of survey respondents said that borrower demand for commercial real estate loans is either "somewhat strong" or "moderate." And, in the current low interest rate environment, 83% of bankers report "very strong" or "somewhat strong" borrower demand for long-term, fixed-rate financing. Demand for short-term floating rate debt seems to be on the decline, with 63% of respondents reporting "moderate" or "somewhat strong" interest. Two-thirds of the respondents expect that the performance of commercial real estate overall will remain strong over the next 12 months, with moderate delinquency levels and limited foreclosures. The multifamily sector is seen as the strongest, with office, retail and warehouse property expected to be "reasonably strong." The lodging sector is seen as the most vulnerable. Bridger's website is at www.bridgerfunding.com.