Regulators Scrutinize Commercial Real Estate Lending

Speculators believe that commercial real estate lending can expect to come under further scrutiny from federal bank regulators.

The implication for commercial property developers is not a positive one. Many developers may struggle to find funding if regulators begin to limit the projects that commercial real estate lenders add to their portfolios.

Federal bank regulators fear that banks that partake heavily in construction lending may be threatened by a downturn in the real estate market.

Florida, which is becoming a hot market for commercial real estate development, is one of the US states facing more stringent monitoring. A proposal issued this month will likely lead to increased monitoring of 11 of South Florida's 20 largest banks later this year.

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