Regulator focus creates openings for non-bank lenders

“I’m
optimistic
about
the
non-bank
lender
side
of
things,”
BeVier
said,
“because
I
think
that
until
the
banking
industry
fully
quantifies
its
losses
in
the
office
sector
specifically,
and
until
the
market
gets
comfortably
that
multifamily
losses
are
either
not
going
to
happen
or
[are]
quantified,
the
banks
are
going
to
continue
to
be
sidelined,
regardless
of
the
interest
rate
environment,
regardless
of
what
the
Fed
does,
because
of
regulators’
concerns.”

Banks
could
remain
“sidelined”
–
with
non-bank
lenders

filling
that
vacuum
–
even
in
those
asset
classes
that
aren’t
feeling
the
same
strain
as
the
beleaguered
office
market,
according
to
BeVier.

That’s
a
product
of
regulatory
scrutiny
across
the
entire
commercial
space,
with
institutional
lenders
facing
calls
to
scale
back
significantly.

“Non-bank
lenders
have
taken
a
lot
of
market
share
from
the
banks
ever
since
the
banking
crisis
last
year,
when
commercial
real
estate
lending
has
been
heavily
scrutinized
by
the
regulators
over
the
course
of
the
past
[12
months],”
BeVier
said.

“That’s
led
to
a
pullback
across
all
CRE
[commercial
real
estate]
buckets,
even
single-family
residential
construction.
The
regulators
still
throw
that
into
the
same
bucket
as
CRE…
they’re
worried
about
office,
but
they’re
just
telling
the
banks,
‘Hey,
you
need
to
do
less
CRE
across
the
board’.”