SAN FRANCISCO—Commercial mortgage lending continues to behealthy in 2017, with rates remaining at historic lows compared tothe projected increases anticipated earlier this year, according toRobert Slatt, principal with commercial mortgagebanking firm, Newmark. Astraditional banks adjust to the new federal high-volatility commercial real estate/HVCRE bankingregulations, construction financing from life insurers, pensionfunds and other non-banking institutional sources is on the rise.These loans spread the risk of new construction for extendedterms, ensuring new projects can still secure debt at thereasonable rates no longer available from traditional banks, hesays.

Newmark's correspondent lenders have placed nearly $500 millionof construction to permanent loans during the past 12 months fordevelopment projects in the retail, multifamily, self storage andmixed-use asset classes. Newmark closed $726 million of commercialmortgages across 80 unique transactions in third quarter 2017. Thisbrings the company's overall production to more than $1.975 billionfor the first nine months of 2017.