Phoenix Borrowers Seek Alternative Financing Sources for Commercial Loans as Lenders Become More Selective

Article originally posted on Phoenix Business Journal on April 26, 2023

A Phoenix mortgage banking firm found its year-over-year commercial real estate loan production was down about 50% in the Phoenix metro during the first quarter of 2022 across all assets, but its local team thinks a rebound could be around the corner.

Adam Parker, a principal at Gantry’s Phoenix office, attributed the slowdown of loan production to higher borrowing rates combined with “significantly fewer sales transactions.” Moving forward, as borrowing rates have “stabilized,” Gantry is seeing an uptick in commercial mortgage requests for buying and refinancing land and property.

“There really isn’t much of an appetite from construction lenders, in particular, to fund new projects,” Parker said. “Part of that is banks are concerned about their own deposits and therefore they’re holding capital very tight. It really has shifted those loan requests that would typically go to a bank into alternative lenders.”

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