The Globe recently interviewed four of the biggest commercial real estate executives in Canada.
They had this to say about commercial financing:
Pierre Bergevin, Pres. & CEO, Cushman & Wakefield
- “I think what we consider normal is between 18 to 24 months away."
- Lenders are still financing, but rates are 60 to 80 basis points higher than spring 2008.
- Financing is typically being capped at 65% LTV
- A replacement to commercial mortgage-backed securities must be found to add liquidity to the commercial market
Mark Rose, Chairman & CEO, Avison Young
- “Normal” is 12-18 months away
- The bellwether will be rising employment figures
- New forms of mortgage-backed securities will arise to fill the gap in commercial financing.
- Lenders will soon get comfortable with LTVs over 60-65%
- "All it will take is just one lender to jump in to get the ball rolling. Someone will see a competitive edge in making 70% financing available and everyone else will start to follow. Then it will go to 75% and then 80%.”
- “I doubt if we will ever get back to the days of 100% financing no matter how overheated the market gets.”
Stefan Ciotlos, Pres., CB Richard Ellis
- "My view is that recovery will start for real in the second quarter of 2010.”
David Bowden, Pres., Colliers International Canada
- "We have bottomed out but I think we are a year to 18 months away from real recovery."
- Private lenders are “leading the way” and “seeing great opportunities in Canadian real estate…I am certain their success will encourage traditional lenders and investors to follow.”