WASHINGTON, DC-We reported this morning that SunTrust Bankprovided a $112 million loan to California State Teachers'Retirement System for Lincoln Place. JLL's Wes Boatright, who wason the team that brokered the loan, explained why banks likeSunTrust were moving away from construction financing, or at leastdiversifying their lending operations. His points made completesense but we wondered: will construction finance ever return torobust health? After all, other forms of commercial real estatefinancing have improved, in some markets quite dramatically.

The National Association of Realtors, forexample, just reported that national banks, which retreated fromcommercial markets in the wake of the recession, have been findingconditions favorable and re-entering the market. During 2012,national banks made up 16% of the market, a 4% increase from 2011,according to data from Real Capital Analytics."Regional banks also added to their portfolio of commercial realestate loans, spelling good news for properties and deals insecondary and tertiary markets," NAR said.

But construction financing specifically? NAR didn't delve intotoo much detail about that. However, in a report released the sameday we heard about the SunTrust loan, ChandanEconomics takes a look at where this segment of thelending market is trending. And the news is good.

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Erika Morphy

Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.