That’s the good news.

On the flip-side, CRE market issues nationwide, coupled with stiff underwriting criteria, are still limiting factors. Market vacancy rates and declining rents are primary concerns except with lower-leverage loans.

For the most part, lenders are maintaining a 65-70% LTV maximum using their interpretation of cap rates. Appraisers seem to be finding some consensus for cap rates without relying on market sales, and lenders are beginning to accept those cap rates, offering stability to valuations. Debt coverage remains a key, if not the overriding, underwriting criteria.

CMBS is making bigger noises about coming back but real evidence is sparse. CMBS needs to prove ability to reliably execute before they become a viable alternative. The first loans will be larger - $15-20 million. There are lock box and funded reserve requirements that will be hard to accept by most. Finally, banks and credit unions have limited abilities, making them niche players.