Bank lending for commercial real estate and development held steady through the first quarter as some sectors experienced high demand and others remained somewhat soft as the COVID-19 pandemic surpassed a year.
Multifamily housing and manufacturing are the hot sectors right now while hospitality and restaurant industries lag. Commercial real estate experts say that accessing credit has not been a problem for projects or transactions, although some banks are doing a little deeper due diligence, asking more questions or upping pre-leasing and other requirements.
“Banks are still lending, (but) everything’s just under a fine-tooth comb to make sure the borrower has the ability to pay those funds back,” said Mark Ansara, managing principal and senior vice president at Advantage Commercial Real Estate Services LLC in Cascade Township. “I think it’s still fluid. There’s just a few more hurdles you have to jump through to make it happen.”
Lenders on a spec-built project, for instance, that wanted 20 percent down before the pandemic now require 25 percent or more “depending on the asset’s location.