A “major portion” of small commercial-property deals in the U.S. have fallen through because of stricter lending standards, according to a National Association of Realtors survey.
While the commercial real estate market showed signs of recovery in 2011, credit tightened in the past year for small businesses, the group said today in a report. Two out of three agents helping clients buy properties for less than $2 million said the purchases were scuttled because of a lack of capital, according to the survey.
Small-business transactions relied heavily on regional and local banks, and 30 percent of the purchases of properties such as apartments, offices, warehouses, land, shopping centers and restaurants were made with cash, according to the survey.
“This is very much a tale of two markets,” Lawrence Yun, the association’s chief economist, said in the report. “There have been notable improvements in capital for large commercial transactions valued at $2.5 million or higher, but there remain significant challenges for small businesses.”
More than half of respondents said lending is just as stringent as a year ago, 23 percent said it was tighter, and 20 percent said it was easier to obtain financing.
The survey was conducted last month. A random sample of 32,459 Realtors with an interest in commercial real estate were invited to complete the online questionnaire, and 474 responded.