Competition increasing in CRE lending

Commercial real estate lending is experiencing increased competition.

Commercial lenders have experienced a rise in competition, as interest in high-quality properties has jumped, according to CoStar.

Some lenders have kept their eyes on safe lending opportunities that pose little risk and give little reward. However, construction and development could witness a stark jump in lending over the next several months, the firm said. Too much lending in these areas is one of the biggest reasons that many lenders failed during the loan collapse and impending recession.

"The area [of lending] that we see being the most competitive on pricing continues to be the commercial real estate arena, with a lot of players in and including the life insurance companies," Kirk Walters, senior executive vice president and CFO of People's United Financial, told the news source.

Some parts of the country have experienced stronger improvement in the market already, Richard Davis, chairman for U.S. Bancorp, told the news source. Both coasts have witnessed an accelerated recovery due to the strong positions their cities are in. Much of the success is from Class A properties.

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