Commercial real estate lenders have responded to increased risk and higher costs of capital in the market by clamping down on the amount of debt they offer to borrowers, dropping loan-to-value ratios across the board, according to MSCI. CMBS providers reduced their LTVs the most of all lender types, cutting them by 14% to 55.7% from 2015 to 2023, while seeing average loan size more than double over the same period. Smaller amounts of debt available mean greater equity is needed to get deals done, opening a window of opportunity for some investors while shifting the CRE financing landscape, at least temporarily. 
“The CMBS market and the origination shops are geared towards execution,” Polsinelli shareholder John Vavas said. “The only way to do that right is to offer a lower-leverage deal. Higher interest rates, higher carrying costs, all equates to an increase in the need for equity for deals.”Average loan sizes for… Read the full story here. | 
