Multiple studies show improved lending environment for commercial real estate sector

Jessica SarterCommercial Lending

The commercial real estate sector has struggled to emerge from the recession as its residential counterpart struggles with low property values, high foreclosure rates and weak demand. However, the value of commercial real estate credit continues to improve. The availability of loans also appears to be improving.

This bodes well for borrowers who have struggled in recent years to find credit. While improved economic activity has helped drive the uptick, the rising popularity of lending marketplaces – venues in which borrowers can seek out lenders and alternative investors – has also broadened the credit options available to entrepreneurs and property owners.

According to a report released this week by consultant DebtX, the aggregate value of Commercial Real Estate (CRE) loans climbed to 86.9 percent this week, up from 79.9 percent at the end of last month and 86.4 percent at the end of January.

"CRE loan prices in February continued the upward trend of the past year," said DebtX CEO Kingsley Greenland in a statement. "CRE loan prices rose due to the continued tightening of credit spreads, despite a moderate rise in treasury rates during February."

Meanwhile, Chicago-based loan provider Clopton Capital reported earlier this week that credit profiles of applicants for nearly all types of business loans are better than they've been in years. Analysts believe this is due in large part to improved economic conditions and their impact on the overall commercial lending market.

"There is definitely a sigh of relief that can be felt amongst us about how it has become so much easier to get the more favorable commercial mortgage rates and to have more commercial loan options than we once could," said Jake Clopton, founder of Clopton Capital.