Commercial mortgage industry 'can take some comfort' in improving fundamentals
The relative value of commercial mortgages as a fixed income product in the current low-yield environment is helping to drive growth in commercial mortgage loan originations, particularly for insurance company lenders, according to David Durning, senior managing director and head of originations for Prudential Mortgage Capital Company.Durning said during an interview at the Mortgage Bankers Association’s 2013 Commercial Real Estate Finance conference that "we are looking at a slowly improving economy," which is creating higher occupancies and positive growth in rents for commercial real estate. He noted that although capitalization rates are historically tight, "as jobs are created and fundamentals improve, that’s where we can take some comfort."
One benefit of the improving economy is the increased quality of the real estate being financed, Durning said. In order to drive growth in 2013 and beyond, he expects to finance larger deals, including in Europe where tight credit has created opportunities for U.S.-based lenders.
Interested in more information? Read the news release or watch David's interview with National Real Estate Investor. Want to speak with David? Contact John Chartier
