Credit restrictions and the market for commercial real estate loans

Brent William Ambrose, John Benjamin, Peter Chinloy

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

This paper develops a model of the market for commercial real estate loans based on the variables used by investors and lenders in property decision-making: the income capitalization (cap) rate, the debt-coverage ratio and the loan-to-value ratio. Empirical results for aggregate United States real estate originations and commitments for 1970-93 indicate that loan demand is sensitive to the cap rate and to building permit issuance. The dominant criterion used by lenders is the debt-coverage ratio as opposed to the loan-to-value ratio, a finding which may have implications for underwriting standards and credit policy.

Original languageEnglish (US)
Pages (from-to)1-22
Number of pages22
JournalReal Estate Economics
Volume24
Issue number1
DOIs
StatePublished - Jan 1 1996

Fingerprint

Commercial real estate
Credit
Loans
Debt
Capitalization
Credit policy
Income
Real estate
Decision making
Underwriting
Empirical results
Investors

All Science Journal Classification (ASJC) codes

  • Accounting
  • Finance
  • Economics and Econometrics

Cite this

Ambrose, Brent William ; Benjamin, John ; Chinloy, Peter. / Credit restrictions and the market for commercial real estate loans. In: Real Estate Economics. 1996 ; Vol. 24, No. 1. pp. 1-22.
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Credit restrictions and the market for commercial real estate loans. / Ambrose, Brent William; Benjamin, John; Chinloy, Peter.

In: Real Estate Economics, Vol. 24, No. 1, 01.01.1996, p. 1-22.

Research output: Contribution to journalArticle

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