Florida banks newly infused with cash are competing for a burgeoning pool of real estate loans, pushing down interest rates, Miami Today reported.
“We’ve come full circle,” real estate attorney Ross Manella, a partner at the law firm of Hinshaw & Culbertson, told the newspaper.
“Banks are calling to let me know they have a lot of money available. Lenders got rid of a lot of bad-performing loans, and are very anxious for new loans. They are very aggressive,” Manella was quoted as saying.
Ocean Bank closed more than $500 million in new loans last year, Sam Monti, the bank’s vice president and credit chief, told Miami Today. Many borrowers were commercial real estate owners looking to take advantage of lower interest rates to refinance properties.
“The new loan activity was also a result of financing purchases of properties, many of which traded hands among individual investors, but others emanating from banks as they sold off properties acquired through foreclosures or short sales,” Monti said.
The U.S. Federal Reserve’s report last week described Florida’s real estate market as a “pocket of strength.”
However, Rick Sanchez, the head of commercial lending at the Florida branch of FirstBank Puerto Rico, said commercial real estate interest rates could be distorted because of ties to the U.S. Treasury rate, which he said is being kept artificially low.
“Everyone has to be careful both with the interest rate scenario and the type of products we are financing,” he said. [Miami Today] –Emily Schmall