“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “
Gary Bechtel | May 08, 2017
While banks will likely continue to have a small pullback in commercial real estate lending, the outlook for marketplace lending is strong.
According to new statistics from the Mortgage Bankers Association, real estate lending is slowing down. Lenders closed $491 billion in mortgage loans in 2016, down 3 percent from the previous year. The decline in the last quarter of 2016 was even more significant, falling 7 percent in comparison with the fourth quarter of 2015.
In commercial real estate, reports show that the decline is even sharper. According to Real Capital Analytics, U.S. commercial property purchases were down 10 percent in 2016 from the previous year, and the trend seems to be continuing into 2017. U.S. investors purchased $50.3 billion in commercial property in January and February of 2017, compared to $80.1 billion during the same timeframe in 2016.
While there is a multitude of potential reasons for this decline, including high property values, increasing interest rates and growing regulatory pressure, real estate lending’s decline is somewhat overstated. While there is a drop off from 2015, 2016 numbers remain strong. It is the third highest year on record for the Mortgage Banks Association, behind only 2007 and 2015.
With $300 billion in loans coming due in the next 18 months, it is unlikely that the slowdown is a sign that the industry is poised for a more significant decline. Historically, interest rates are still unusually low, the stock market bullish and the near-term outlook for the U.S. economy is positive.
Strong outlook for marketplace lending
However, 2016’s minor slowdown does leave room for marketplace and other non-bank lenders, which have fewer regulations imposed on them than banks and other traditional lenders, to fill the demand for commercial real estate loans. Dodd-Frank, Basel III and other regulations are stifling deal flow for banks by making it more difficult to approve new loans or refinance maturing loans. As of December 2016, CMBS originators must retain a 5 percent interest in the transactions they originate. Because of these and other regulations, banks may have difficulty closing transactions, choose to issue smaller deals to reduce their own exposure or pass along increased costs to borrowers.
While banks will likely continue to have a small pullback in commercial real estate lending, the outlook for marketplace lending is strong. In 2015, alternative lenders originated 68 percent more loans than the year prior, according to the Mortgage Bankers Association. With American Banker reporting a 700 percent growth in the marketplace lending industry in just four years, this growth is poised to continue.
With fewer restrictions and regulations to impede deal flow, marketplace lenders can help borrowers finance shorter-term deals that may fall out of traditional banks’ underwriting criteria and offer options for borrowers who may not be able to access loans through traditional means for a wide variety of reasons.
While commercial real estate lending as a whole may have been down slightly in 2016, the outlook for marketplace and other non-bank lenders is strong for 2017. With fewer regulations and faster, more accessible underwriting, marketplace lenders will continue to gain market share over traditional lenders in the coming years.
Gary Bechtel serves as president of Money360. Prior to joining the company, he was chief lending/originations officer with CU Business Partners, LLC, one of the nation’s largest credit union service organizations (CUSO).
SEE IT ALL: http://www.nreionline.com/lending/how-will-real-estate-lending-slowdown-affect-marketplace-lenders
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
List of Economic Development Projects in Pinal County, Revised 2-14-17
- WEEKLY APARTMENT CLOSING UPDATE / THROUGH April 28, 2017 / Phoenix Arizona Metro
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
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2016 Official Arizona Visitors Guide
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Timeline of Phoenix, Arizona history
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Facts of Arizona – year 1848 to 2013
Feel free to contact Walter regarding any of these stories, the current market, distressed commercial real estate opportunities and needs, your property or your Investment Needs for Comercial Properties in Phoenix, Tucson, Arizona.
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Walter Unger CCIM, CCSS, CCLS
I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
Please reply by e-mail walterunger@ccim.net or call me on my cell 520-975-5207
Walter Unger CCIM
Senior Associate Broker
Kasten Long Commercial Group
5110 N 40th Street, Suite 110
Phoenix , AZ 85018
Direct: 520-975-5207
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