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| I'm a rural ag guy, so no expertise in CRE here. But last fall I spoke with the head of CRE credit for a regional operating in southern US markets. He was well aware of lowering occupancy and rising interest rates. They had been aggressively tightening credit standards for some time and modelling rent / occupancy reductions into their repayment cashflows. They were also not giving much weight to borrower guarantees, wanting hard equity. 40% is common on these deals is my understanding. Perhaps even that is not enough - time will tell.
I don't know any bankers who are players in downtown city CRE so I thought he was interesting. He gave the impression they had been preparing for some time. I have little doubt other banks are going to feel pain.
Do you know if the loans your friend got are Freddie / Fannie? Most bankers I know would not be okay with what he was doing. | |
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Anybody following the commercial building loan crisis
