CRE lending on the rise

Posted on April 11, 2014

Farmington Hills, Michigan (April 17, 2014) – Friedman Integrated Real Estate Solutions, one of the nation’s leading providers of commercial real estate services, is optimistic regarding forecaster predictions that commercial real estate lending is expected to remain strong in 2014.

Commercial real estate (CRE) properties include office, retail, industrial, multi-family, hospitality, and medical office buildings. When the recession hit, lending to developers and owners of such properties became unfavorable and the CRE market suffered. Today, with the economic recovery steadily gaining momentum, lending is on the rebound and CRE is reaping the benefits. According to a recent report by, “New CRE loans hit an all-time high with the fourth quarter of 2013 marking the highest volume of commercial and multi-family mortgage originations since 2007. Originations for commercial bank portfolios increased by 54% from last year’s fourth quarter.” The CRE recovery is expected to accelerate even further in 2014: creating demand, increasing occupancy rates and driving rents higher.

In particular, the office and multi-family markets are poised for growth this year. The CoStar Group released a list of 2014 outlooks from industry leaders they are following and the office market is one to watch. The office vacancy rate is expected to decline and demand for office space is expected to increase. Multi-family resurgence is also anticipated.

One major factor contributing to this uptick is near record low interest rates. At the 2014 National Interagency Community Reinvestment Conference held last month, Federal Reserve Chairwoman Janet Yellen indicated the Fed plans to keep interest rates low in a continuing effort to spur economic activity by encouraging businesses to invest. “We are trying to make it cheaper for businesses to build, expand and hire,” said Yellen. Minutes from a recent Federal Open Market Committee meeting released April 9, forecast interest rates would rise faster than previously predicted with Yellen commenting it would happen in six months.

Just yesterday, however, in her remarks to the Economic Club of New York, Yellen backpedaled signaling that rate hikes are at least two years away. “We need to be alert to what is happening in the economy and to respond to what we see happening, and not a fixed idea that we perhaps held at some earlier time about what will come to pass.” With interest rates now likely to remain low through 2015, there is good reason for borrowers to be optimistic. As more investors look to CRE for profitable opportunities and existing companies seek loans to expand, borrowers will have the upper hand with banks bidding for their business.

Locally, banks are back in the commercial lending game and eager to deal. In an article dated January 26th, Crain’s Detroit Business reported on the commercial lending trend with area banks. “Troy-based Flagstar Bancorp Inc., the largest bank headquartered in Michigan, saw commercial lending increase by $150 million, to $386 million, in the first nine months of 2013. The Bank of Ann Arbor grew its commercial loan portfolio by $54.6 million, or about 12% in 2013.”

David Friedman, President & CEO, believes, “It is an excellent time to be a borrower. With interest rates at historic lows and CRE loans at an all-time high, investors should take advantage of the opportunities available to them across diverse property types.”


Recognized as one of the largest privately-held commercial real estate organizations in the nation, Friedman Integrated Real Estate Solutions provides clients with a single point of contact for the full range of services it offers.

Friedman manages over 140 facilities encompassing more than 16M SF of commercial and 7,000 multi-family units across the country. Friedman’s brokerage team has over 800 current listings with $10 billion in closed transactions. As owners and managers of commercial property for 25 years, Friedman understands what it takes to achieve results that maximize the client’s objectives.

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