Fifty-three percent of nationwide lenders to the commercial real estate sector expect loan production to increase in 2009 versus 2008, according to findings from Jones Lang LaSalle's annual 2009 Loan Production Outlook survey.
Those who expected increased lending all were private-equity lenders and government agencies, noting an average expected rise in production up to 20% in 2009. The surveyed banks and life companies all expected a volume decrease in 2009 ranging from 30% to 80%.
Jones Lang LaSalle's survey – distributed to 50 nationwide lenders, including a mix of life insurance companies, commercial mortgage-backed securities dealers, private lenders, commercial banks and government agencies – was conducted at an opening event during this week's Mortgage Bankers Association's Commercial Real Estate Finance/Multifamily Housing Convention and Expo in San Diego.
Given the frozen state of the commercial mortgage-backed securities market throughout much of 2008 and continuing in 2009, and the lack of confidence in the market, many lenders have been hindered in their efforts to originate new loan allocations, leaving borrowers who seek funding to refinance approaching maturities or start new construction projects with few options.
As borrowers increasingly encounter maturing loans, refinancing would seem to be the order of the day for 2009. This year, 80% of lenders responding to the survey predict that up to 40% of their company's loan allocations will be used to refinance maturing loans within their existing portfolios. Another 13% expect refinancing of maturities to make up 80% to 100% of their portfolios.
SOURCE: Jones Lang LaSalle