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

TRD 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?
As widespread protests sweep the country, the real estate industry reflects on its decades-long support of the NYPD (Photo illustration by Alexis Manrodt for The Real Deal, Getty, iStock)

As Black Lives Matter protests rage on, NY real estate bleeds blue

As Black Lives Matter protests rage on, NY real estate bleeds blue
States Title's Max Simkoff and The Real Deal's Hiten Samtani

The Interview: States Title’s Max Simkoff on reforming the murkiest corner of real estate

The Interview: States Title’s Max Simkoff on reforming the murkiest corner of real estate
Mayor Bill de Blasio and Gov. Andrew Cuomo (Getty, Paul Dilakian)

Despite looting, NYC reopening on track: Cuomo

Despite looting, NYC reopening on track: Cuomo
(Photos by Sylvia Varnham O'Regan, Getty)

After looting, BIDs reverse guidance on boarding up stores

After looting, BIDs reverse guidance on boarding up stores
“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think

“5 years ago, people would say, what’s a TikTok?” Bill Rudin on why NYC’s office market may be more resilient than you think
arrow_forward_ios

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

Loading...