Trends in commercial real estate finance

In today's commercial real estate market, there must be demand for the space to be built, information for the entities that make the financial commitments, and management to ensure that the property's promise is realized. The more active providers of capital to the commercial real estate market include: 1. commercial banks, 2. life insurance companies, 3. pension funds, 4. savings and loan associations, 5. credit companies, 6. foreign investors, 7. real estate syndications, and 8. mortgage-backed securities (MBS). Commercial banks continue to be the traditional source of construction and interim term loans, while life insurance companies are well suited for extended-term lending. Direct investment by pension funds is the greatest potential source of long-term real estate debt. The rapid emergence of thrift institutions as commercial real estate lenders has been one of the most important developments of the 1980s. The enormous growth of the MBS business is part of a trend away from the historical role of the financial institution as an intermediary.