The below are tips and tidbits about local Los Angeles area retail real estate as well as related local and national news and trends. For your information, from one of our shopping center real estate development partners and experts, Sam "Bachie" Bachner.
By ICSC SCTWeek February 17, 2012
Commercial property loans to surge in 2012: Report
U.S. commercial mortgage originations are projected to hit $230 billion this year, up 17 percent from last year, and will probably reach $290 billion by 2015, according to The Mortgage Bankers Association. Commercial mortgage debt outstanding is expected to grow this year too, to upwards of $2.4 trillion, 2 percent more than last year. By the end of 2015, mortgage debt outstanding will probably exceed $2.5 trillion, the trade group says.
Life insurance companies and government-sponsored entities will be the most active lenders, the group predicts, saying also that the CMBS market will recover steadily through this year. ?Our forecast anticipates continued strength in lending by life companies and the GSEs, increased lending by banks and others, and a slow but steady return in CMBS activity,? said Jamie Woodwell, the association?s vice president of commercial real estate research, in the report. ?Low loan maturity volumes over the next few years, coupled with moderate sales transaction activity, will mean that a relatively robust supply of mortgage capital will be a catalyst for deal activity.?
Unfortunately for retail borrowers, the trend seems to be driven by lending to multifamily and industrial properties. The association reports that in the fourth quarter of last year, when commercial mortgage originations grew 13 percent from the year-ago quarter, loans on the industrial side grew by 43 percent, and those in the multifamily sector increased by 31 percent. By comparison, on the retail side loan originations in the fourth quarter fell 8 percent year on year, while originations for health care properties dropped 24 percent, office properties decreased 29 percent and hotels sank 44 percent.
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