CRE Lending is Up, Running and Positive

June 30, 2021

The CRE Finance Council (CREFC) released results of its second quarter board of governors’ sentiment survey. Results pointed to a “continued positive outlook for commercial and multifamily real estate finance.”

“As restrictions are lifted in states across the country and the economy reopens, we are hopeful for a strong recovery with investors eager to move off the sidelines,” executive director Lisa Pendergast said in prepared remarks.

The board is made up of nearly 60 senior executives in commercial real estate finance markets. They represent balance sheet and securitized lenders, loan and bond investors, mortgage bankers, private equity firms, loan servicers, rating agencies, attorneys, accountants, and others.

The view from the survey is encouraging, with “83% of the Board having an overall positive sentiment for all commercial real estate (CRE) finance business over the next 12 months, up from 72% in Q1 2021.”

At 119.2, the sentiment score was higher than at any point since at least the fourth quarter of 2017.

In addition, an incremental survey that started in the first quarter of 2020 and focused on the pandemic impact on CRE provided some other good news. About 31% of members said they were seeing more activity now than they had before the beginning of the pandemic. Also, “[m]ost of CREFC’s lenders (88%) reported that their lending programs are fully operational, up from 71% in Q1, and only 5% indicating no new lending.”

The CREFC first quarter survey had stated that 95% of the board expected better U.S. economic performance over the next 12 months.

The group is keeping an eye on developments out of the federal government. “”Given increasing concern about government policy and regulations’ impact on commercial real estate, CREFC is closely monitoring any and all decisions out of Washington that could impact the industry and will provide our members with the most up to date analysis possible,” Pendergast said in the statement.

An example of the type of regulatory impact was last Thursday’s announcement by the CDC that it would extend the eviction moratorium through July.

“This has obviously been an extremely trying year-plus for the entire sector, with the lack of clarity on when the moratorium will ultimately end,” Marcie Williams, president of RKW Residential, which oversees more than 25,000 apartment units in six states, told at the time. “Hopefully, the CDC’s announcement that this is expected to be the final extension gives the industry the clarity it needs to make difficult decisions and move forward.”

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