Fed: Demand Grows for CRE Loans

WASHINGTON, DC-The Federal Reserve Bank’s October 2012 Senior Loan Officer Opinion Survey on Bank Lending Practices shows a slow easing of lending standards among commercial real estate lenders, coupled with growing demand for these loans. In short, banks lending into this space are following the same trajectory as other lenders, albeit at a slower pace.

What is interesting is that survey identified greater demand for these loans than in previous surveys. Specifically, a fraction of banks that reported a strengthening of demand for CRE loans increased notably, to about 45% on net, the Fed reported. The Fed also found that on balance, a small fraction of domestic respondents to the October survey reported that standards on CRE loans had eased over the previous three months. Previous quarterly surveys have showed the lending standards as remaining the same.