July 19, 2023 | less than a minute read

Alternative and Creative Capital Options Become More Important as CRE Lending Declines for the First Time in Two Years

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John Cagigas

Associate

Nina Goodall-Bernal

Associate

Get in touch

John Cagigas

Associate

Nina Goodall-Bernal

Associate

As many in the market know all too well, data from several economic research firms have indicated sharp declines in commercial real estate lending in the wake of the sustained interest rate turbulence. According to several data points, multifamily lending, in particular, is experiencing a slowdown. That makes it even more important for developers and other players in the market to cast a wide net in exploring alternative solutions to capital, such as preferred equity. The real estate team at Morris, Manning & Martin, LLP has a wide range of experience representing clients in numerous forms of capital raises on both the debt and equity side and would be happy to assist.

Last month, commercial real estate lending experienced a decline for the first time in two years, reflecting the impact of tighter credit conditions and higher mortgage rates on the sector. According to data from Refinitiv, outstanding debt on commercial properties decreased to $5.44 trillion in June, marking the first drop in commercial real estate lending recorded over the past two years. The decline was primarily driven by a slowdown in lending for multifamily properties, as demand weakened in response to rising interest rates. Multifamily property debt alone decreased by $21.6 billion last month, as reported by Capital Economics.