NYC construction lending boosts flagging CRE finance market: Analysis
Lending declined last month in NYC
New York City commercial real estate lending fell last month to $5.3 billion, down 34 percent from the trailing 12-month average of $8.8 billion. But the total was much lower if new construction loans were excluded. Last month lenders provided several large construction loans to TF Cornerstone, KIPP NYC and others.
The total amount of non-construction debt recorded in January was only $3.3 billion.
Much of the decline was due to a lower level of sale transactions and reduced refinancings, because of the rise in interest rates. With the Federal Reserve’s decision this week to slow the increases, investors believe the lending markets will start ease in the coming months. But for now, regulators have put pressure on lenders, keeping their pursestrings tight.
The total volume is low, and that’s in part because banks like New York Community Bank (now Flagstar Bank) and Signature Bank, which have always done a high volume of refinance and new acquisition lending, have been less active.
PincusCo tracks all loans recorded in New York City of $5 million and up, determining the prior lender, the prior loan amount, and the new lender and loan amount. This analysis does not include loans below $5 million, or loan modifications or extensions of loans refinanced in the past two years. In addition, this analysis is based on recorded date, not the closing date, in order to analyze the data as it hits city records. The information in this article was not vetted with any of the banks.
Signature Bank, for instance, recorded its largest loans last month, for $45.3 million, given to Watermark Capital Group and Maguire Capital Group‘s acquisition of a large development site in Sunset Park, and a $45 million refinance of a property with RFR Holding. The total for Signature was under $200 million, far below the more than $500 million recorded in December 2022.
And New York Community, now known as Flagstar Bank, has had a slow three months with loans totaling just $267 million over the past three months.
Direct link to Acris document. link