Skittish market chills Kansas City-area loans - bizjournals:

disqualify-sida.blogspot.com
Area banks remain skittish in the face of an unpredictable realestate market. “With the uncertainty around real estate valuedin general, it’s quite possible that lenders are goingv to expect the owners to have more equity in the projec t to offset further reductions in values,” Presidentt Kevin Barth said. “As of now, we haven’ft seen a huge reduction in values forcommercialp properties, but it’s highly possible we Barth said most developers looking to build an income-producingv property need to have strong, reliable tenants already lined up, to soothe a bank’s worries about the loan payments.
Exceptions are made for longtime clients with solid track he said, but most of those developers are leergy of taking the additional risk of building a speculative projectg in a precarious market. With the secondary market for commercial mortgage-backed securities basically nonexistent, that only adds to the difficulties, said Bob president of . Banks, insurance companies, and savingd and loans generally are the only institutione available to make commercial realestate loans, he and without investors to resell the loans to, they have only so much It creates a very cautious mood. “It’s just a more conservative periord where you have to lean on pastrelationshipsx ...
that is wheres you’ll have the best chance to get adeal done,” Regniefr said. Kevin Cook, director of ’sz financial services group inKansas City, said he doesn’gt see an implosion brewing for the area’sx commercial lending market. The area didn’t have as many bank get in troublewith large, speculative developments in states such as Nevada, Florida and California, he said. commercial real estate is the next shoe to drop with but commercial banks have been building up reserves for thesweexpected losses, even though they haven’t specificallyu been charged off yet,” Cook said.
“Big banks are and I think regional and small communit y banks were more conservativand weren’t really active players in the secondaryt market.” Grant Burcham, CEO of , said the only commerciao real estate loans the bank made were for owner-occupiedx buildings. “It’s not as dependenr on future rent, tenants or It’s dependent on the viabilitg ofthe owner-occupant,” he said. “So if you’rer a solid company, you can still construct a new building for Burcham said most companies fitting thatdescriptiom aren’t building now, though, because they want their numbers to get back to norma first.
Commerce Bank’s Barth said fewefr lenders aremaking owner-occupied loanas right now because many banks put too many eggs in that baskeft and regulators want more balanced portfolios. It’zs the same reason he expects Commerce’s commercia real estate lendingto grow, even as it declinee at other banks. “There will be a lot of loans coming up for renewalthis year, and with some of the otherr banks overlending and having too much concentration we think it is an opportunity for Barth said.
“We kept a balanced portfolio and stilk have a lot of dry powder touse