Mastering the metropolis through research and thought leadership.
search menu
Interviews

Real Estate Borrowing in the Post-Crisis Period

Spencer B. Haber, CEO, H/2 Capital Partners LLC
April 6, 2015

Borrowing ConstraintsCommercial BrokerageInvesting
Spencer B. Haber, the CEO and Chairman of H/2 Capital Partners and Chairman-elect of the Zell/Lurie Center's Advisory Board, recently sat down with Martin Bucksbaum Professor of Real Estate, Finance and Business Economics & Public Policy, Nancy A. Nasher and David J. Haemisegger, Director of the Zell/Lurie Real Estate Center, Joe Gyourko to discuss the state of commercial real estate borrowing and lending after the Great Recession

Overview

Executive Summary

Spencer B. Haber, the CEO and Chairman of H/2 Capital Partners and Chairman-elect of the Zell/Lurie Center's Advisory Board, recently sat down with Wharton real estate professor Joe Gyourko to discuss the state of commercial real estate borrowing and lending after the Great Recession. Haber noted that post-crisis regulation and the need for banks to de-lever their balance sheets has generally made bank and insurance company lending more simplistic than prior to the crisis. In particular, banks are emphasizing commodity-like risk and smaller loans to be held on balance sheet. They are also less flexible and nimble than they were pre-crisis. Bank construction lending has also slowed to a fraction of its pre-crisis size. But, for down-the-middle loans, banks are being aggressive on pricing and funding them from their balance sheets. This conservativism has left a shortfall in funding for commercial real estate. For example, of $200 to $300 billion per year of new loans that need to be made, insurance companies are providing only $60 billion. The gaps in the traditional credit markets are being filled by private capital--for instance, pension fund and sovereign fund capital. This capital is fulfilling a traditional finance function. Haber expects private capital's role to continue as long as it enjoys a sufficiently low cost of capital to compete with banks and insurance companies. However, to be successful, commercial real estate lending using private capital must become a customer-driven business with an infrastructure and a platform for making loans.

In This Section
Explore Topics

1010 Affordable Housing Amazon Amenitization Architecture Artificial Intelligence Asia Australia automation Autonomous Vehicles bonds Borrowing Constraints Brexit California Canada Capital Business China Co-Working Environment coastal markets cold storage Colombia Commercial Brokerage Commercial Real Estate commissions Congestion consumer bias covid-19 CRE credit card market Credit Default Swaps Credit Insurance Credit Risk Transfers Culture Data Analytics data centers Data Collection Technology Debt Market Demand Demographics Density Development Discrete Choice disruption Diversity drones e-Commerce Economic Corridors economic policy economics education election studies Equity Funds Equity Market Ethnic Factors Europe Fannie Mae financial asset management Foreclosures Foreign Policy France Freddie Mac general equilibrium Global global economy Global Financial Crisis Globalization great depression Great Recession healthy buildings Hedonic hospitality Housing & Residential housing boom Housing Disease housing prices Housing Supply Identity Income Inequality India inflation Inter-generational mobility interest rates Investing jobs labor market Lagging Regions land use regulation Language life sciences Macroeconomics malls Market Pricing megacities Microeconomics Migration Minimum Payments Mixed-Use Mobility moral hazard mortgage insurance mortgage market Mortgage Rates Mortgages Multi-family Nation Building Non-Traditional Mortgages Office Market office sector pension funds Placed Based Policies Political Risk Price Discovery Private Equity Business public health public policy Public Schools real estate brokerage Real Estate Investment Real Estate Investment Trusts Recession Rental Retail Retirement reverse mortgages Risk Adjustment risk management risk-shifting robotics single family housing Slums Sorting South America Spatial Regions spillover effect stimulus package Sub-Prime Mortgages Supply Chains Sustainability Technology telecommunications trade transportation unemployment United States Urban Urbanization Warehouse welfare work from home

Samuel Zell and Robert Lurie Real Estate Center
The Wharton School, University of Pennsylvania
4th Floor, Dinan Hall, 3733 Spruce Street ยท Philadelphia, PA 19104
215-746-8098 · contact us

Copyright © 2000-2024, The Trustees of the University of Pennsylvania.
All materials on this site are for personal use only.
Website developed by Zero Defect Design

arrow_drop_up