The last time Mark Scott, president of Commercial Mortgage Capital, remembers a lender invoking the Material Adverse Change, or MAC, clause in a deal was during the Great Recession. Now, he’s hearing it more and more in conversations with capital providers. “I’ve had lenders email me and say the market is experiencing a MAC and we are now raising the rate on your loan from 3.5% to 4.5%,” he tells  “It is definitely being invoked more now.”

There are other changes in the commercial real estate lending market that Scott says do not bode well for borrowers, or for liquidity in general.  Regional banks are no longer locking or committing to rates. Many have shuttered new originations, and several are reneging on term sheets and threatening to not honor commitments and /or re-trade and adjust previously agreed upon rates. Loans that used to be placed rather easily, say 60% LTV multifamily loans, are getting fewer bids.  “I’ve had several lenders tell me they have too much exposure to commercial real estate and multifamily and they are exiting the market,” Scott says. 

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