CRE lending will "remain a preferred allocation for capital"
Gantry has announced that its commercial mortgage production remained stable in the first quarter despite rising rates and tightening underwriting criteria.
“Our first-quarter production totals met expectations from the start of the year, with both lenders and borrowers remaining active and resilient in response to inflationary forces and global economic disruption from the war in Ukraine,” said Gantry principal Andrew Mekjavich. “Commercial real estate will remain a preferred allocation for capital. However, we anticipate that the upward pressure on rates will create challenges for real estate owners seeking the last dollar of leverage, with the most competitive debt retained for more conservative owners.”
In a release, the independent commercial mortgage banking firm revealed that it closed $1.07 billion of new commercial loans in Q1, originating a total of 111 loans. During the period, Gantry funded loans from more than 60 capital sources, including life company and bank lenders, which accounted for more than 85% of funded loans. Agency lenders met the demand for higher leverage investments, while bridge lenders financed value-add acquisitions in the multifamily marketplace.
“Banks and credit unions remain an attractive source for mid-term loan structures, with bridge lenders emerging as the preferred source for value-add financing,” Gantry added. “Additionally, life companies continue moving into the bridge lending space in pursuit of short-term yields to offset inflationary forces and now compete with debt funds and alternative lenders for properties in transition or pursuing stabilization.”
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“Our production in Q1 is a direct reflection of the unique blend of correspondent lenders we represent, the prudent client base we serve, and the skilled staff throughout our nine national offices,” Mekjavich said.
