Big sale highlights changing CRE finance sector

HWijjF7RwOPGEJ1nb4Zb_IMG_37731General Electric recently garnered attention with its decision to sell over $23 billion in commercial real estate assets and wind down its commercial finance arm. The deal illustrates major forces reshaping how U.S. companies finance and invest in commercial real estate. Prolonged low interest rates have buyers lining up to acquire commercial real estate portfolios for their attractive yields. Meanwhile, rising real estate prices have whet seller appetites, giving giant regulated conglomerates such as GE the opportunity to profitably exit. A Green Street Advisors index of commercial property shows prices 15% higher than the peak of the last cycle in 2007.
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New Lenders Enter Property Market

According to an article in the Wall Street Journal, a new group of lenders has begun to target properties valued at $10 million and less.
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Reporter, Al Yoon explains that this might be good news for mom and pop landlords and small-business owners.

Lenders have launched new programs this year focusing on loans to smaller properties. Many banks and other lenders have been avoiding smaller deals since the financial crisis because they can be riskier than larger properties, and the underwriting costs are high relative to their size.
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