Iced Real Estate Capital Markets Begin To Thaw

Mid-way through 2010, we are finally seeing the commercial real estate debt and equity market begin to thaw, following an almost two-year credit crunch. Owners are finding that institutional sources of debt and equity are looking for opportunities again in commercial real estate.

The capital market meltdown that began in 2007 froze the flow of capital investing in commercial real estate. Institutions that invest or lend on commercial real estate assets began hoarding cash, fearful of how commercial real estate values might be impacted. Institutions such as life companies, banks, and pension funds were some of the major providers of liquidity to the commercial real estate market impacted by this crisis.

The commercial real estate loans being originated today are different from the loans originated three years ago. Lenders and equity investors have had a flight to quality assets as they return to the commercial real estate market. Lenders are looking to lend on A and B assets at low leverage levels.

Read the full article and view the accompanying graphics in the Greater Minneapolis BOMA September newsletter.

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Jim Hoopes is a senior vice president/senior director at NorthMarq Capital. Read Jim’s bio.

www.northmarq.com