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CRE Lenders Increasingly Careful

CRE Lenders Increasingly Careful Hero
The lending environment is a constant topic of discussion at research HQ – without lenders, the deals just can’t flow. This week’s data comes from REALPAC, where they survey lenders quarterly on topics such as accepting new clients and the size of their loan book.

While a ten year term wasn’t standard even before rate hikes, it’s disappeared completely in the last six months. This squeezes a lot of the more marginal projects that needed a long term to make the math work re: payments and debt service coverage.

Lenders haven’t necessarily turned against CRE – 30% report a bigger loan book than pre-COVID. But they are being much more careful about terms and customers than they were 18 month ago. Fewer report being open to new clients (previously that was always 100% of lenders) and most now want a max term of three years at most.

Is this the ”new normal” or just a temporary pause due to recession fears and uncertainty about the Bank of Canada’s approach? I welcome your thoughts as always.

CRE Lenders Increasingly Careful Graph

Summary
Lenders are focusing on shorter terms and being careful about their selection of new clients, as interest rate hikes continue to weight on the market.

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Pour plus d’informations, veuillez contacter:

Adam Jacobs

Head of Research | Canada

Toronto Downtown

Colliers Canada's head of research, leading a cross-country team of 20 mapping, analytics and research professionals. Formerly head of Canada research at Cushman Wakefield and Director of Analytics at Oxford Properties. Featured in mainstream publications such as the Toronto Star, industry publications and podcasts. Specializing in the big picture and the fundamentals driving real estate - demographics, the macro environment and the global economy. 

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