Community banks across the United States issued a record amount of commercial real estate loans in the first half of 2021.
MountainSeed Analytics’ Commercial Real Estate Data Index (CRE) data indicates a dramatic increase in these loans in the first half of the year compared to the same period in 2020.
The index – which is compiled from a survey of commercial real estate trends at hundreds of community-based financial institutions – found the pace is expected to eclipse 2020 by 39% and the first pre-Covid figures of 2019 by 30%.
“These figures show that community and regional banks and credit unions remain competitive and optimistic about CRE in a post-Covid environment”, said Carl Streck, CEO of MountainSeed.
“Because community lenders are close to assets and their local markets, they can move faster and be more competitive than much larger lenders – and the numbers show it. “
Meanwhile, home and office loan origination is expected to decline slightly year over year. Home loans are expected to increase 100% following their pandemic lows.
According to the data, lenders are now confident in the tourism and travel sector after being severely affected by the pandemic. However, hesitations about office and retail space persist as employees continue to work from home and online shopping affects future retail leases.
Small banks have made inroads into the CRE industry for several years following the global financial crisis of 2007-09. The restrictions imposed on large investment banks in the aftermath of the crisis restricted their lending capacity and opened the market to alternative lenders such as asset managers and smaller banks.