Continued growth in small-balance lending.


Small-balance lenders anticipate that 2014 commercial mortgage originations for loans under $5 million will challenge last year's robust total, according to research firm Boxwood Means, Stamford, Connecticut.

Property sales volume and prices will also accelerate despite a general consensus that interest rates will rise, Boxwood's survey of small-balance commercial mortgage finance executives said.

"This is no 'small' market in terms of annual originations and property sales, and the views of survey panelists will likely boost the confidence of lenders and investors that the small-balance commercial space will continue growing this year," said Randy Fuchs, principal with Boxwood Means.

Small-balance loans generally have fewer documentation and recording requirements than larger commercial real estate loans.

Small-cap commercial real estate fundamentals rebounded sharply during fourth quarter "as small-business owners and tenants took measure of healthier vital signs of the U.S. economy and drove leasing volumes higher," reported Boxwood.

"Demand for all major types of commercial space soared during the fourth quarter of 2013, posting some near-record figures." Boxwood reported. Office and industrial sector net absorption reached their fifth-highest level in at least 32 quarters, and retail absorption also ranked among that sector's top 10 quarters in seven...

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