CHARLOTTESVILLE, VA—It's official. Thecommercial real estate lending market has returned to health, or atleast is on the cusp of doing so, according to two separatereports, one by SNL Financial, the other by Chandan Economics. Bothnote that loan delinquencies are reaching post-crisis lows and thatlending is increasing at a healthy clip.
SNL reports that US commercial banks saw a 14-quarter lowdelinquency rate of 5.28% on commercial real estate loans as of theend of June, and the ratio of bad CRE loans has more than halvedfrom the peak of 10.76% nine quarters ago. A number of banks, manybased in California, have a clean bill of health now in terms offaulty CRE loans.
Chandan echoes these findings, noting the second quarter saw"the largest onequarter drop in the bank CRE and multifamilydefault rate so far into the recovery." The default rate acrosscommercial real estate and apartment loans held by banks fell to3.11% in Q2—the lowest in three years.
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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.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
