Just about everything I have read recently is pointing toward a continuing recovery for commercial real estate in 2012. In fact, a recent article published in the Bloomberg Business week Blog is worth sharing. They wrote: 

“U.S. commercial property deals are likely to climb 50 percent to $300 billion this year as loan maturities force asset sales and the economy grows, Real Capital Analytics Inc. said in its annual list of market predictions.

“Commercial real estate remains very attractive relative to other asset classes, and it is likely that equity capital will be both more plentiful and more motivated over the coming year,” the New York-based real estate research company said in today’s report. While a 50 percent increase is likely, there is a “good chance for a surprise to the upside,” the firm said.

Property owners and lenders have at least $160 billion of troubled commercial mortgages to resolve by reworking debt or selling the real estate backing them, according to Real Capital. With attractive financing difficult to come by, loan maturities will drive transactions, the firm said.

“While prices and loan terms have not improved enough to make refinancing feasible in most cases, properties can increasingly be sold at prices above their outstanding loan balance and are being listed for sale six to twelve months prior to maturity date,” Real Capital said.

As rents and occupancies start to rise consistently, investors will face increasing pressure to make acquisitions before expansion peaks and price gains accelerate, according to the firm.

(Editors: Daniel Taub, Steven Crabill; Reporter: Hui-yong Yu)

In fact, Elaine Misonzhnik (Nuwire Investor) recently stated that Banks are finally increasing lending for Commercial Real Estate.

She said that Last year proved difficult for some investors to finance commercial real estate (CRE) deals due to tighter lending restrictions imposed by banks that suffered from a rash of defaults and increased regulation. Now it appears banks are more willing to lend as they move into 2012, evidenced by several large CRE projects financed by U.S. Bank, Wells Fargo and others. Analysts note that banks are still cautious about lending and are being choosier about projects, but are also interested in unloading defaulting loans and freeing up capital for better opportunities, which may prove beneficial for investors moving forward.

All good news!

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