Grubb & Ellis Montana Commercial, LLC

Bank lending to commercial real estate has followed an interesting trajectory in recent years. After increasing steadily, the outstanding value of loans leveled off and began to decline in September 2008 when the bankruptcy of Lehman Brothers paralyzed credit markets. Then in the last week of September, loan volume spiked as panicked borrowers sought to tap their existing lines of credit to secure working capital. Since that time, loan values have leveled off and begun to decline; the number of loans maturing and not being renewed is greater than new loans being issued, which are few. With bank credit shrinking and the CMBS market still largely frozen, commercial real estate values have fallen by nearly 40 percent.
Source: Federal Reserve, Grubb & Ellis

Robert Bach, Senior Vice President, Chief Economist, has 30 years of professional experience in real estate market research, consulting and city planning. His commentary on the real estate markets is provided here on a weekly basis.

This entry was posted on Monday, October 5th, 2009 at 11:59 am and is filed under Weekly Market Insights. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.