50% more lenders set to deploy $4bn in 2010

However, a survey of US real estate lenders by Jones Lang LaSalle warned banks will extend loans by up to two years on the best properties to avoid a wave of foreclosures.

Lenders in the US are preparing to loan significantly more capital to real estate investors in 2010, with 50 percent more financial institutions expecting to issue up to $4 billion of debt this year.

A Jones Lang LaSalle survey of mortgage bankers revealed 43 percent of respondents expected to lend between $2 billion and $4 billion in 2010, more than double the number in 2009. By 2011, the number of financial institutions expecting to lend up to $4 billion a year to real estate could jump to 70 percent.

Even institutions lending more than $4 billion a year saw rising levels of optimism. The annual study, conducted at

With more than $1 trillion worth of commercial real estate loans expected to mature between now and 2013, it’s no surprise that a majority of borrowers are placing significant importance on restructuring those loans.

Bart Steinfeld, Jones Lang LaSalle’s managing director of the real estate investment banking practice

the Mortgage Bankers Association conference in Las Vegas, showed a 38 percent rise in the number of lenders expecting to deploy more than $4 billion in 2010. In 2008, just 6 percent of institutions questioned – including insurance companies, CMBS dealers, private equity lenders, commercial banks and government agencies – said they would lend over $4 billion that year. That figure rose to 9.3 percent in 2009 and 15.2 percent this year.

A quarter of lenders singled out multifamily assets for their loan dollars, with another 21 percent saying they would focus on the office sector in 2010. Lenders were also willing to finance greater sums toward single-asset acquisitions, with 28 percent saying they would lend more than $100 million and 56 percent lending more than $50 million to single-asset transactions in 2010.

David Hendrickson, managing director of Jones Lang LaSalle’s real estate investment banking practice, added that a few life companies and investment banks were even willing to lend up to $500 million on a large, single asset deal this year.

However, many lenders said they would allow borrowers to extend maturing loans on quality assets by up to two years to avoid a wave of foreclosures. “With more than $1 trillion worth of commercial real estate loans expected to mature between now and 2013, it’s no surprise that a majority of borrowers are placing significant importance on restructuring those loans,” said Bart Steinfeld, Jones Lang LaSalle’s managing director of the real estate investment banking practice.  Two-thirds of life companies questioned said up to 60 percent of their capital would be dedicated to refinancing maturing loans.

Wes Boatwright, managing director of Jones Lang LaSalle’s real estate investment banking team, stressed though an equilibrium was emerging between the bid-ask spread. “That alignment should be the impetus many lenders need to bring large and small balance loans and REO to market,” he said.