Industry Info
Advantages of Private Lending
According to a recent report from the St. Louis Fed (https://www.multihousingnews.com/how-private-credit-helps-multifamily-developers-persist-until-26/), commercial real estate lending by U.S. banks slowed to an 11-year low in the fourth quarter of 2024 due to such factors as higher prices for land, labor and materials as well as rising interest rates. This sharp contraction reflects a confluence of macroeconomic and sector-specific headwinds that have dampened banks’ appetite for CRE exposure.
Going forward, the need for private credit will increasingly vary by market. According to the Avison Young midyear 2025 multifamily outlook, major cities such as San Francisco, New York and Los Angeles are continuing to be faced with higher construction costs, which will limit new supply. As a result, the need for loans to complete or refinance projects should fall in those markets.
https://www.multihousingnews.com/how-private-credit-helps-multifamily-developers-persist-until-26/
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