Flat lending market defies banking improvements

The amount of institutions on federal regulators' troubled bank watch list is at a three-year low, yet the national bank lending scene, at least in commercial real estate, remains flat.

That's the analysis from CoStar Group, a Washington, D.C.-based real estate data firm. CoStar, in a new report, says multifamily lending nationwide increased 1% in the third quarter, while investment property lending was up about one-quarter of a percent. Multifamily lending is close to its previous pace, of year-over-year increase of 5%, the report also shows. But investment property lending “is way off its 9% a year growth over the last four quarters.”

The data falls further in construction and development loans. Loans in that area, CoStar says, decreased 3.3% in the third quarter over the second quarter, and are down 17.3% year-over-year.