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Could lending trends affect your commercial real estate goals?

On Behalf of | May 11, 2023 | Commercial Real Estate |

Savvy California real estate investors and developers keep abreast of news that could affect the commercial and residential real estate markets alike. Shifts in one market may serve as harbingers for shifts in the other, so taking a broad view when digesting information concerning trends, regulatory changes and world events that could impact California specifically is often key to success. 

Recently, one of the most pressing issues affecting the commercial real estate market specifically involves lending practices. Essentially, many lenders are tightening their financing criteria, even as the market has begun to struggle nationally as a result of high debt loads, rising interest rates and vacancies in a number of sectors. 

What does this mean for the market in California?

While imposing choosier lending practices may make sense for banks and other lending institutions during a period of economic and marketplace uncertainty, it is also important to balance the need to keep the market as robust as possible. If lending activity dries up, the fallout from that trend will be inevitable as opposed to growing fears of hardship that are still “only” likely to occur in the months to come.

One of the things that will be most important for California real estate investors and developers to keep in mind as the market evolves is that California real estate is not a monolith. The fallout from recent bank challenges is going to manifest differently in Silicon Valley than it will in Orange County, for example. 

As a result of how dynamic and diverse California markets tend to be, seeking professional guidance can be helpful as those who are interested in continuing to pursue their real estate goals take thoughtful next steps forward.