Economic Center Blog
Welcome to the First American Economic Center Blog, a top source for the latest housing market research and analysis driven by Chief Economist Mark Fleming.

You Can’t Build What You Can’t Fund

By Xander Snyder on June 19, 2023
Securing commercial real estate (CRE) financing in today’s market is no easy task. After the three bank failures this year, which triggered increased regulatory scrutiny of bank-held CRE loans, banks have pulled back on lending. This is especially true for riskier varieties of lending, such as construction loans, which involve assets that are not ... Read More›

Commercial Real Estate

Bank Pull Back Creates Construction Lending Opportunity for Debt Investors

By Xander Snyder on June 12, 2023
Building a property from the ground up entails substantially more risk than purchasing an existing building that is already generating income. Likewise, financing construction is riskier than lending against existing structures since development projects don’t generate income to pay loan interest until they are completed. For this reason, most ... Read More›

Commercial Real Estate

Uncertain Economic Outlook Keeps Renters Where They Are, Pushing Cap Rates Up

By Xander Snyder on May 23, 2023
In times of economic uncertainty, people tend to stay put. After all, why take on new financial obligations, like an apartment lease, when the future is less certain? Today, though unemployment remains low, inflation remains high, and the recent slew of layoffs at tech companies has many worried about their own financial position. The recent, ... Read More›

Commercial Real Estate Potential Cap Rate Model Multifamily

CRE X-Factor: For Commercial Real Estate, Banks Aren’t the Only Lender in Town

By Xander Snyder on May 9, 2023
When most people think of a loan, they think of a bank. Banks take deposits from customers in return for interest payments or other services. The bank then invests those deposits in loans, such as commercial real estate (CRE) loans, and securities that pay a higher interest rate than the bank is paying on the deposits. However, a bank is not the ... Read More›

Commercial Real Estate CRE X-Factor

Where is the Risk Exposure to Commercial Real Estate?

By Xander Snyder on May 5, 2023
After the recent bank failures, a good deal of attention has been paid to commercial real estate (CRE) debt held by banks of different sizes. But banks aren’t the only CRE lenders. Insurance companies, mortgage REITs, and private debt funds that lend investors’ money also regularly make CRE loans. Taken together, banks of all sizes only account ... Read More›

Commercial Real Estate

Why it’s So Hard to Convert Offices into Housing

By Xander Snyder on April 13, 2023
At first glance, converting old office buildings into apartments seems like an obvious solution to two pressing real estate challenges. There’s a national housing shortage of several millions of housing units, and office space is substantially underutilized due to the adoption of remote work. Declining office use is a significant risk to office ... Read More›

Commercial Real Estate Office Multifamily