Who’s Lending, Who’s Not

NEW YORK CITY-CBRE’s Lender Forum, which the firm compiles from proprietary data from its debt and equity lending platform, indicates that non-agency lending is on the rise. Other data points indicate an ongoing shift in who is lending as well.

Greg Greene, senior VP, debt & equity finance, tells GlobeSt.com that “in 2009 and 2010 the percentage of our total business that was agency business was just so high.” Since then, agency business, just above 5% in 2007, has risen to a seasonally adjusted level of  32% for June 2011.

“That’s because the agencies continued to lend, multifamily was still very active, and other types of lending fell off pretty dramatically,” Greene says. Also notable in the data is the ever-increasing power of life insurance companies. The report shows that, during the first half of 2011, the agencies and life insurance companies accounted for the bulk of commercial and multi-family loan originations.

“What’s happening this year is that a lot of the life companies have become very competitive on multi-family financings—competitive in that they’re winning even going head to head with the agencies,” Greene says.

With continued anxiety caused by the economic outlook at home and the European fiscal crisis, Greene thinks that a year that started off with “cautious optimism” has now devolved into an anxiety that continues to affect lending. “It’s a very anxious time right now in lending,” he says. “Whenever you have anxiety, people retreat to safety as best as they can. For parties that are in the business of making commercial mortgage loans, in a time like this of high anxiety, their fears cause them to move away from uncertainty. So what they’re doing is this: they’re financing the highest quality real estate in the strongest real estate markets in buildings that have a strong tenant mix and minimal roll-over.”