Commercial mortgages decline in size and number, data shows

New York /
Dec.December 15, 2008 02:40 PM

The number and size of loans declined in several sectors of the city’s non-residential market since Sept. 15, when Lehman Brothers collapsed, compared to non-residential loans in the fall of 2007, according to data from PropertyShark.com.

Among multifamily, mixed-use buildings, vacant land and stores, the amount and number of loans declined between Sept. 15 and Dec. 2, 2007, versus the same period of time this year.

In the multifamily and mixed-use sector alone, there was nearly a 10 percent decline in the number of loans made, to 775 from 858, and a 32 percent decline in the total amount of money loaned, to $1 billion from $1.488 billion.

“The market tanked in June of [2007],” said Craig Evans, senior managing director at Colliers ABR. “The market went into [a] tailspin then.”

Particularly in the office market, he said, few loans have been made since June last year. One of the largest office loans made this fall was the $102 million loan for Tower 56 at 126 East 56th Street.

While several other non-residential sectors saw a decline in the number of loans made, the sizes of the loans that were made in those sectors increased, according to the data.

In the hotel sector, only 11 loans were made this fall compared to 16 last fall. But this year, the amount of money loaned increased 268 percent to $390 million, up from $106 million last fall.

“Hotels were still doing very [well]” this fall, Evans said, but “they’re just about to fall off.”

Only in the industrial sector did the number and amount of loans show a sizable increase, with $712 million spread over 163 loans this fall, up from $326 million spread over 149 loans in the fall of 2007. The change represents a 9 percent increase in the number of loans and an 118 percent increase in money loaned.

The 118 percent increase can be attributed to several large industrial loans, Evans said.

On the residential side, loans have become harder to obtain as banks raise their standard for homebuyers.


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