Bank survey finds strong borrower demand and tighter credit standards. (Commercial).ACCORDING TO according toprep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. A MARCH SURVEY BY SAN Francisco-based Bridger Commercial Funding, Bridger Semi-Annual Survey of Lender's Commercial Real Estate Perspectives, banks still offer a ready supply of capital to finance commercial real estate despite tighter credit conditions and expectations of uneven property sector performance. The survey reflects the opinions of 150 senior loan officers at 119 banks throughout the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . More than 85 percent of banks represented in the survey foresee fore·see tr.v. fore·saw , fore·seen , fore·see·ing, fore·sees To see or know beforehand: foresaw the rapid increase in unemployment. their 2003 commercial real estate loan volume equal to or greater than their 2002 volume, and most of them are selectively building out-standings. Growth in commercial mortgage portfolios in 2003 is projected despite tightening credit standards Credit Standards The guidelines a company follows to determine whether a credit applicant is creditworthy. reported over the past 120 days, with just more than half (51 percent) of the banks reporting "somewhat tighter" underwriting Underwriting 1. The process by which investment bankers raise investment capital from investors on behalf of corporations and governments that are issuing securities (both equity and debt). 2. The process of issuing insurance policies. and 37 percent reporting unchanged standards. Borrower demand also remains reasonably strong, according to the bankers surveyed. Almost 75 percent described borrower demand for commercial real estate loans as either "somewhat strong" or "moderate." With interest rates at historical lows, 83 percent of bankers surveyed reported "very strong" or "somewhat strong" borrower demand for long-term, fixed-rate financing. Borrower demand for short-term floating rate debt seemed to ebb, with 63 percent of respondents In the context of marketing research, a representative sample drawn from a larger population of people from whom information is collected and used to develop or confirm marketing strategy. reporting "moderate" or "somewhat strong" interest. Fully two-thirds of bankers surveyed expect commercial real estate overall performance to remain strong over the next 12 months, reflecting moderate delinquency delinquency Criminal behaviour carried out by a juvenile. Young males make up the bulk of the delinquent population (about 80% in the U.S.) in all countries in which the behaviour is reported. levels and limited foreclosures. However, opinions about sector performance varied. Multifamily property performance was projected as the strongest sector by 84 percent of respondents, with low to moderate delinquencies anticipated. Office, retail and warehouse/industrial property performance should remain reasonably strong, approximately 90 percent of bankers observed, although they anticipate higher rates of delinquencies and foreclosures than in the multifamily sector. Finally, lodging continues to be viewed as the most vulnerable property sector, with more than 8o percent of bankers surveyed expecting weak performance to continue through 2003. The complete results of the survey can be found at www.bridgerfunding.com. |
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