Latest Commercial Real Estate Market News & Investment Advice in Los Angeles

Banking Sector Overall Has Substantially Improved

April, 2012
by Karl Niehaus, President, CREI

Commercial Overview:

INCREASED RETAIL SALES LEAD TO RENOVATION. As the retail industry begins to recover from the great recession, shopping centers are planning some major changes that aim to get consumers out of their homes and into the mall. From new developments to revamps and renovations, shopping centers are making improvements. The improvements come at a time of improvement for the retail industry. According to data derived from the US Department of Commerce, retails sales are expected to grow 6% this year as consumer confidence and spending is on the rise. The uptick in business has added fuel to the retail market, encouraging the progress of the revamps and renovations that aim to raise the shopping centers to new heights.

Economic Overview:

EASIER LENDING FOR REAL ESTATE? The banking sector overall has substantially improved its liquidity position over the past few years. Indeed, large banks in the aggregate have more than doubled their holdings of cash and securities since 2009, according to remarks last week by Ben S. Bernanke, chairman of the Federal Reserve System. The credit quality of large banks' assets is looking better as well, although the improvements have been uneven across types of loans. Having experienced stronger demand over the past three months, banks have started easing their lending standards for commercial real estate. The move is another signal that banks are more willing to start growing their CRE loan portfolios as they have in other lending areas. Good news for buyers and sellers.

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