Lenders pulled back from making new commercial mortgages for sale as bonds as the European debt crisis rattled markets in July and August, threatening to choke off funding to borrowers with debt coming due in smaller cities where commercial mortgage backed securities lenders are more competitive.
Originations have resumed, with Goldman Sachs and Citigroup Inc. set to sell $1 billion in debt tied to shopping centers, hotels and office buildings this week, Bloomberg data show.
"What we have is a tale of two cities," Ambrose Fisher, managing director for Oaktree Capital Management LP, a Los Angeles-based investment firm with $73 billion in assets under management, said at a Jan. 20 conference on real estate opportunity investing in Laguna Beach, California. "Outside the core markets and the core products, it's difficult to get financing."