The commercial real estate debt landscape has become considerably more crowded of late. The resulting contest to fund deals, along with historically low cost of capital, has contributed to higher real estate prices and taken an inevitable toll on underwriting standards.
The latter trend is most easily observable in the information-rich CMBS market, but is also present in the competitive overlaps between lenders. A range of indicators, from historically low debt yields to falling amortization, shows us the direction of understanding standards even if it does not tell us our exact position in the risk cycle. Read More