Six months ago, it was money chasing deals. Now it’s deals chasing money
Lenders Raise the Bar For Commercial Real Estate
From the article:
Commercial real-estate lenders, spooked by the collapse in residential housing, are reining in riskier loans on fears that underwriting standards were too loose.
During the last few months, lenders have been requiring significantly more equity to get projects rolling, while the cost of obtaining debt continues to shoot higher. Meanwhile, banks are avoiding making loans to commercial real estate on concerns about the quality of construction and development loans.
“Six months ago, it was money chasing deals. Now it’s deals chasing money,” said Larry Vogler, president of Prime Group Inc., a Chicago-based commercial real estate developer.