Seventy-seven percent of participants in the CRE Finance Council’s latest survey believe the economy will perform well over the next 12 months. The CRE Finance Council’s Fourth-Quarter 2020 Board of Governors’ Sentiment Index brought a new uptick of optimism about the future of commercial real estate finance. *
CREFC’s Board of Governors consists of 56 senior executives representing the diverse facets of the lending and mortgage-related debt investing markets for CRE, including multifamily. In response to a key survey question on the overall outlook for the U.S. economy, a notable 77% of the Board indicated an expectation that the economy will perform better over the next 12 months. The response marks a turning point in the 2020 trend, as only 53% of survey participants anticipated a better economic performance over the upcoming 12-month period in Q3-20, and a mere 9% shared the sentiment in Q2-20.

Respondents noted their concern, however, over the potential for higher rates over the next 12 months and the effect they could have on businesses in the CRE finance industry. As Lisa Pendergast, Executive Director of the CRE Finance Council, said in a prepared statement, “caution is still (sic) top of mind within our lender community, but there is optimism too.” Many of those, however, who follow the Fed are less concerned about rate increases over the next 9 months – the rest of 2021.
So, lenders may be willing to consider loosening their purse strings, but don’t expect a dramatic lowering of the bar for underwriting criteria. There’ll still be a focused eye on the day-to-day, week-to-week, month-to-month progress with COVID. And the continuing policy announcements out of Washington will be filtered for their potential impact.
Drilling down into the data its clear that survey participants are widely scattered on their opinions of expected performance for the different CRE segments – a fragmented market. All of the segments were liked by some, but none of the segments were liked by all – and the spread of the range was significant! Translated for you, the borrower, this means that finding the right lender for your particular acquisition will take some time and talent.
Interested in acquiring some of the good deals that are already showing up? You may want to check with us for arranging financing.
We work for you, not for the lender.
*Data is courtesy of the CREFC, as published in the Commercial Property Executive, 2-17-21.
Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC.
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