Mortgage Banking

Making sense of commercial real estate finance.

The Market

Posted by Jordan Crouch on April 14, 2008

Commercial real estate lenders continue to fear a recession as new earnings report this week from several financial companies don’t look good. Last week, GE released disappointing earnings and Frontier Airlines joined several other airlines in the bankruptcy line. We have not hit the bottom yet; no one is sure where it is.

Most lenders have instituted a floor rate around 6% or 6.25% (meaning regardless of what the 10 year T-Bill does, the lender won’t lend below that level). We are still seeing 5 and 7 year terms being more competitive than a 10 year term. Conduits are still out of the market and will be for the foreseeable future.

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