Realtors: Tight Credit Choking CRE Loans

While the commercial real estate market showed signs of recovery in 2011, credit tightened in the past year for small businesses, according to a National Association of Realtors (NAR) survey. NAR reported that 474 commercial real estate agents credited a lack of capital for soured deals on properties for less than $2 million.

Small-business transactions relied heavily on regional and local banks, and 30 percent of the purchases of properties such as apartments, offices, warehouses, land, shopping centers, and restaurants were made with cash, according to the survey. The NAR report noted that there have been improvements in capital for large commercial transactions valued at $2.5 million or higher, but significant challenges for small businesses remain.

More than half of the respondents said that lending is just as stringent as a year ago, 23 percent said it was tighter, and 20 percent said it was easier to obtain financing.