Ten months ago, I noted that some feared commercial real estate loans could be the next shoe to drop.Today's New York Times cited evidence suggesting that time may be here.
Delinquencies and default rates are increasing, the availability for new commercial real estate loans is drying up and prices for commercial properties are softening. Moody’s/REAL Commercial Property Price Index has dropped nearly 12 percent since its peak last October.
I spent a lot of time this past week talking with bankers and commercial real estate lenders. I heard about cease and desist orders on construction lending, inability to lend against commercial real estate, tenants no longer qualifying as "credit-tenants", reduced loan to value advance rates, tighter underwriting criterion and a need for more bridge loans.
The other shoe is dropping.
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Tags : commercial real estate loans , private money loans , bridge loans , hard money loans , credit tenant leases , California
Tags : commercial real estate loans , private money loans , bridge loans , hard money loans , credit tenant leases , California
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