Multifamily lending trends changing

Overall commercial real estate transaction volume has been increasing since hitting a low point in October 2009, due diligence firm executive Joe Derhake recently wrote in GlobeSt.com.

Overall commercial real estate transaction volume has been increasing since hitting a low point in October 2009, due diligence firm executive Joe Derhake recently wrote in GlobeSt.com.

According to him, increased Environmental Site Assessments indicate a combination of foreclosure proceeding preparations and positive commercial real estate activity. Multifamily lenders have provided the steadiest, most reliable business in 2011 and throughout the recession, according to Derhake. Most multifamily debt, he notes, is associated with the U.S. Department of Housing and Urban Development, Fannie Mae and Freddie Mac.

Lending activity by commercial banks in general has been dropping, although there are some exceptions. Significant activity has been driven by real estate advisors and investment trusts, according to the source, which buy with cash and may not go to the market for debt.

On the other hand, Derhake notes the real estate information assembled indicates the earnings from commercial mortgage-backed securities have dwindled significantly, although not as sharply in 2011 as the year before.

While lenders have reportedly grown more conservative in their practices to some extent, Derhake estimates 2012 will see increased commercial real estate transaction volume and industry improvement.



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