For the first time since 2010, U.S. banks committed more in lending to commercial real estate projects than they did in the previous quarter, according to a national report. With improved access to financing, more businesses may have the financial backing needed to consider securing office space for rent in top metros such as Dallas, Houston or New York City.
Chandan Economics released a report that showed U.S. banks increased their lending for multifamily and other commercial real estate properties by $5 billion in the fourth quarter of 2011, which was the first quarterly increase in lending for this industry since 2010.
In an email to Bloomberg, analysts with the firm called the findings "encouraging," and Martin Gutenberg, acting chairman for the Federal Deposit Insurance Corporation (FDIC), told Reuters that the increase could suggest that banks are ready to contribute positively to business growth in the form of new loans.
Many small businesses and entrepreneurs have sought commercial real estate leases in recent years, but tight lending standards - primarily brought on by the housing crisis several years ago - have inhibited many from securing financing.
With more loans available, more businesses may now seek commercial real estate in Dallas, New York City, and other top metropolitan areas for business.
The improving fortunes of the commercial real estate market has even encouraged positive gains in real estate investments, another factor that may benefit businesses that are searching for office space for lease in Houston or elsewhere. Barrons cited a report from Fidelty Investments which spoke positively on the growth of real estate investment trusts, and if positive action from investors, bank confidence may continue to grow and benefit commercial real estate buyers.