Bank CRE Loan Growth Heats Up with the Markets

The nation’s banks continue to respond to strong lending demand in hot commercial real estate markets. Total commercial real estate loans among all commercial banks and savings institutions insured by the Federal Deposit Insurance Corp. (FDIC) are up 7.1% from a year ago, now totaling $1.75 trillion. That compares to $1.63 trillion at the peak of the CRE markets at the end of June 2007.

Construction and development loans jumped the most from a year ago, up $33 billion (15%) to $256 billion. Banks increased multifamily loan balances 11.8% year over year to $315 billion as of June 30, 2015, according to the FDIC. The largest total was for other non-farm non-residential property loans, which stood at $688 billion at the end of June, 6% higher than a year ago.

Bucking the bank lending trend were loans of $1 million or less made to small businesses backed by nonfarm, nonresidential properties. Banks decreased their small business lending 1.6% over the past 12 months, making 30,284 fewer such loans. [CoStar]

 

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