Regulators are making noise about the potential for over-lending in the commercial real estate industry, but are those concerns reflected by what practitioners are seeing in their day-to-day business?
That’s a question many in the commercial real estate industry have been asking since December 2015, when regulators released a statement to banks and other lending institutions signaling concerns over commercial real estate lending.
Lou Nimkoff chair of the National Association of Realtors® Commercial Legislation and Regulatory Advisory Board, joined NAR Commercial Regulatory Policy Representative Stephanie Spear to address that question and talk about what’s ahead for 2016.
Counter to the December statement, anecdotal evidence from NAR members points to continued difficulty getting loans from banks. In addition, the Federal Reserve recently released a report that shows loans are, in fact, hard to come by.
To that end, Nimkoff noted that the discrepancy of opinions may be the result of changing perspectives on lending since the Great Recession.
“From 2009 to 2012 there basically was no lending,” said Nimkoff. “Sure, we have some lending going on relative to what happened during that period…But when you start from zero, getting half-way to fifty-five on the highway isn’t fast enough.”
Spear noted that in addition to broader lending issues in the industry, an upcoming risk retention rule going into effect as part of the Dodd Frank Act will be a big focus of NAR’s commercial efforts in 2016. She also added that NAR has signed on with a coalition of peers to create a legislative fix to the rule.
Copyright NATIONAL ASSOCIATION OF REALTORS®. Reprinted with permission.