Banks allow for more write-downs of commercial real estate loans

Robert O'Brien
Robert O'Brien

More lenders are allowing write-downs for outstanding loans that were given to commercial real estate investors. Analysts attribute the trend to improving rental and vacancy rates, among other factors, the New York Observer reported.

“First of all, the banks’ balance sheets are a lot stronger today than they were in 2009 and that gives them a lot more capacity for doing this,” Robert O’Brien, Vice Chairman and U.S. Real Estate Services Leader at Deloitte, told the Observer. “And, besides that, we’re just seeing better fundamentals.”

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In addition, Kenneth Weissenberg of the accounting firm EisnerAmper told the Observer that the market keeps opening up as rating companies, such as Standard & Poor’s, alter how they rate properties as well as certificates linked to commercial mortgage-backed securities.

The Observer said that JPMorgan Chase was among the financial institutions allowing for more write-downs. [NYO]