European banks scared off from U.S. commercial property loans

New York /
Dec.December 23, 2011 02:32 PM

alternate
text
From left: The entrance to Eurohyop’s NYC offices and 9 Metrotech Center (building credit: PropertyShark)
As European banks mitigate risk amid the debt crisis that’s consumed the continent, many have stopped lending for commercial real estate projects in the U.S., Reuters reported. The total amount of money European banks loaned to the sector has fallen by 31 percent in the last two years, according to Trepp, and more banks have announced they would reduce U.S. property loans.

While European real estate lending is not widespread in much of the United States, it is crucial in big cities like New York. Forest City Ratner was directly affected by this trend in October, when German bank Eurohypo suddenly dropped out of serious negotiations to provide a $65 million loan for 9 MetroTech in Brooklyn.

“It’s their problems at home that are more the issue rather than [being] hugely worried about U.S. exposure,” Matt Anderson, managing director of Trepp, said.

Combine Europe’s departure from the real estate loan market, and the tightening lending standards at home, and the U.S. is forced to look to Asia to fund large projects. But Japan has also retreated from U.S. commercial real estate lending, and though China has stepped up its lending by more than 260 percent to $3.1 billion, and Taiwan has increased its exposure 6.7 percent to $2.4 billion, that doesn’t compensate for the billions Europe is no longer willing to lend. [Reuters]


Related Articles

arrow_forward_ios
Eric Gordon
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Eric Gordon on the evolution of the residential data game — and how to stay competitive in the new world
Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
MAP: Here’s a look at all the Big Tech locations in NYC
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
What will proptech look like in 2019 and beyond?
The price of a new home in China’s largest cities fell for the first time since 2015
New home prices in China’s largest cities fall for first time since 2015
New home prices in China’s largest cities fall for first time since 2015
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Real estate powers Blackstone’s best quarter ever
Building Engines CEO Tim Curran and JLL CEO Christian Ulbrich (Building Engines, Getty)
JLL buys Building Engines for $300M
JLL buys Building Engines for $300M
Terreno Realty CEO W. Blake Baird and an aerial of the property (Google Maps)
Terreno Realty pays $44M for NJ industrial site
Terreno Realty pays $44M for NJ industrial site
Madison Realty Capital Co-Founders Josh Zegen and Brian Shatz with a rendering of the River North development (Madison Realty Capital, FXCollaborative)
Madison Realty’s altered plans for SI complex approved
Madison Realty’s altered plans for SI complex approved
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...