New York Property Moguls Get Creative as Big Banks Curb Lending

  • Insurers boosted commercial property loans in second quarter
  • Deutsche Bank slips from first place in CrediFi lender ranking

It’s tougher out there for New York City’s commercial real estate developers seeking cash for their latest projects.

Big banks are pulling back and those filling the gap are demanding tighter terms, according to Ely Razin, chief executive of CrediFi Content Co., a property-focused data provider that published its quarterly rankings of the largest commercial real estate lenders in New York on Tuesday. Deutsche Bank AG slipped from first to second place in the three months through June. 

Borrowing rates are still low. But lenders are making smaller loans relative to the value of the property, Razin said.

“You’ve got to be smarter about where you go to get money because it’s not as easy,” Razin said by phone. “There’s still money in the market, and there will continue to be money in the market, it’s just coming at somewhat more restrictive terms.”

Insurers -- typically conservative lenders -- have increased their market share, CrediFi’s report showed. Meanwhile, sales of commercial mortgage-backed securities, traditionally a steady source of funding for smaller projects in less desirable locations, have tumbled this year amid a combination of market volatility and looming regulatory changes.

Deutsche Woes

Prudential Financial Inc., MetLife Inc. and American International Group Inc. were all among the top 10 commercial real-estate lenders in the second quarter, according to CrediFi’s report. Signature Bank, a New York-based bank that serves private businesses, was the biggest lender, displacing Deutsche Bank. Signature was ranked second in the first quarter.

Regulators’ concerns about the German lender, its exposure to Britain’s exit from the EU and a $14 billion fine related to mortgage-backed securities make Deutsche Bank’s future lending in New York uncertain, CrediFi said in the report.

“What we’re seeing is a significant shift in the make-up and to some degree therefore the availability of commercial real-estate financing,” said Razin.

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