Banks Lay Groundwork for Commercial Comeback

Some community bankers are gearing up for increased activity on the commercial real estate (CRE) front in 2012. A recent Federal Reserve Board survey of senior loan officers found that more than 13 percent of respondents noticed stronger CRE demand in the fourth quarter, up from 1.8 percent a year earlier.

"Barring Europe imploding, we do generally expect the economy to continue to improve and the real estate market to continue to improve," says Ryan Severino, senior economist at Reis Inc., a commercial real estate research firm in New York. "If someone is thinking about ramping up their [CRE] lending process, now would not be a bad time to do it."

Umpqua Holdings recently reported that it is enhancing its CRE divisions in certain cities. Many of those cities have lost many local competitors when the real estate market collapsed, and survivors want to take advantage on a recovery.

"We think the markets are starting to, and will continue to, come back," says John Swanson, who is leading Umpqua's new commercial real estate division. "Now is the time to bring in some experienced CRE people. With the downturn and reduction in many CRE groups over the last two-to three-plus years, I've had an impressive list of candidates to choose from."

Source: "More Banks Laying Groundwork for CRE Comeback," American Banker (Dec. 22, 2011)