As we’ve seemingly adjusted to new lifestyles as a result of COVID-19, aversion to pandemic risk has also subsided. Commercial and multifamily debt financing is making a full comeback. Fannie Mae and Freddie Mac have reduced the COVID-19 reserve requirements to six months and in many instances, where the loan-to-value (LTV) ratio is lower, have removed the restrictions all together. Community banks have also begun to increase their lending guidelines, meaning borrowers are able to stretch to secure higher valued buildings.

These small shifts have created a lending landscape that is catalyzing new deals. We have seen multiple regional banks offer partial and full-term interest-only options as a way of gaining market share against competitors. This aggressive lending was unheard of last year.