Firms still conservative on commercial lending, panelists say

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Commercial lending is continuing at a conservative pace amid concerns about the ongoing housing crisis, panel members said at yesterday’s National Realty Club luncheon, discussing current mortgage financing and joint venture opportunities. Melissa Farrell, managing director at Prudential Mortgage Capital Company, which last year originated $7.7 billion in mortgages, said her company is “actually looking to do more lending,” not less, but at the same time, it’s become more conservative in waiting around for just the right transactions. Stable cash flows and minimal income interruptions can boost a potential borrower’s chances, she said, though those looking to acquire strip malls or hotels may be out of luck. George Klett, chair of the commercial real estate committee at Signature Bank, agreed. As far as strip malls go, he said, Signature wouldn’t finance them. “I don’t know anyone who is doing that right now,” he said. Signature is doing office and other retail transactions on a conservative basis, as well. “We are concerned about the economy, and also about unemployment,” Klett said. Despite the tenuous state of commercial lending, however, the group also expressed optimism about the future. On the foreign investments front, Simon Ziff, president of Ackman-Ziff Real Estate Group, argued that the weak dollar is bringing foreign investors in, not discouraging them, and said he’ll be watching that market very closely in the coming months. And overall, said Dave Karson, managing director at Cushman & Wakefield Sonnenblick Goldman, “I think and hope we are close to the bottom in capital markets velocity.” TRD

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