Auto Repair is Hot and Retail is Not
I recently spoke on commercial real estate loan matters at the National Association of Mortgage Brokers Annual Conference in New Orleans. While at the conference, I wandered through the exhibit room and brain-stormed with the exhibitors.
Not surpisingly, commercial real estate lending was way down. Commercial lenders had scaled back their appetite for retail properties.
But one asset class was hot - of all things, auto repair! Apparently some of the larger commercial lenders had noticed that the best performing class of commercial properties in their portfolios was in fact auto repair. It makes sense. Americans are not buying new cars right now but are rather just repairing their existing cars.
One lender with whom I spoke had actually raised its loan-to-value ratios on auto repair loans from 65% to 75%, in order to encourage more commercial loan applications on such properties.
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