Bankers Optimistic About Commercial Real Estate According to Latest Survey by Bridger Commercial Funding.

Business Editors/Real Estate Writers

SAN FRANCISCO--(BUSINESS WIRE)--March 11, 2004

Commercial real estate bankers continue to regard commercial real estate as a favored asset class and are actively looking to lend on it, according to the latest survey released by Bridger Commercial Funding. While they expect the major property sectors to exhibit relative stability in rents and occupancy levels in 2004, this is the first time in two years that a majority of the bankers surveyed expect to increase their commercial real estate exposure, suggesting that the market has passed its trough and is recovering.

Two additional signs of recovery in commercial real estate revolve around the trend in credit standards and bankers' overall sentiment toward the sector. After reporting tightening credit and underwriting standards in surveys conducted in 2002 and 2003, bankers now indicate that those standards have not changed. Similarly, the survey found a movement toward bullishness about the sector from neutral sentiments reported since 2002.

Within each major property sector -- multifamily, retail, office, warehouse/industrial and lodging -- the majority of respondents foresee moderate performance in 2004. However, among all respondents, there was a bias toward moderate-to-strong performance for multifamily, retail and warehouse/industrial, versus a bias toward moderate-to-weak performance for office and lodging.

In a notable shift in trend, the majority of bankers surveyed have become more cautious on retail properties, downgraded their outlook to moderate from strong. This suggests that bankers may have become more skeptical about the ability of consumers to continue to sustain economic growth as they have during the past two years.

In another bullish sign for commercial real estate, loan demand is expected to be moderate to strong for all purposes -- construction, acquisition and value-added lending, as well as for mini-perms, according to the bankers surveyed.

Bridger's Survey of Lenders' Commercial Real Estate Perspectives is conducted semiannually, and covers commercial real estate loan officers at banks nationwide. The results of the survey were tallied from responses by 75 different financial institutions nationwide that on average hold more than $500 million in commercial real estate loans. The complete results of the Lenders' 1st Half 2004 Commercial Real Estate Perspectives Survey can be viewed at www.BridgerFunding.com.

Bridger is the U.S. banking industry's leading provider of commercial real estate capital and balance sheet management services, supplying permanent loan origination and seasoned debt trading capabilities to over 1,200 banks and 3,800 loan officers nationwide. Bridger gives banks ready access to the secondary mortgage market as a balance sheet management strategy that efficiently reallocates risk. Through the company's CMBS loan origination program, banks boost financial performance by generating substantial fee income while retaining and enhancing borrower relationships. In addition, Bridger's BankXchange(TM) platform optimizes banks' loan portfolio risk profiles and returns by facilitating purchases and sales of loan portfolios, whole loans and participations.