EDR Poll Finds Subprime Shockwave Hit on Commercial Real Estate Market
Lenders, Environmental Professionals Say Market Fears Lead to Slowdown
MILFORD, Conn., Sept. 25 /PRNewswire/ — Results from a recent Environmental Data Resources Inc. (EDR) poll of environmental professionals and commercial property mortgage lenders indicate that the subprime lending crisis that shook residential housing markets this year has sparked fear in the commercial real estate market, creating a market slowdown and higher credit costs.
The market trend results were calculated by EDR from questions fielded during an online panel discussion among more than 260 US environmental professionals and mortgage lenders who participated in the event, entitled “The 'Credit Crunch'- What It Means for Commercial Real Estate Transactions and Environmental Consultants.”
The September 13 survey results indicate that 75 percent of participating respondents see a negative impact on the pace of commercial real estate transactions across the country as a result of the turbulence in financial markets.
According to the poll, almost half of respondents see “slightly fewer” transactions, while another 28 percent see a pronounced negative impact attributed to subprime fears.
“Environmental professionals see that subprime lending will continue to affect commercial real estate with more expensive debt, less property flipping, and fewer buyers in the market,” said Dianne Crocker, Senior Economist and Managing Director of EDR's Market Research Group. “Environmental due diligence can be a bellwether of commercial real estate activity, and these numbers show us that our colleagues too are seeing a market slowdown.”
According to data shared during the discussion, the commercial real estate market and the environmental due diligence market showed relatively flat to declining activity in July and August. This is partly attributed to the slowdown in the commercial mortgage backed securities market as fears of defaults in the subprime market made investors skittish about securitized assets backed by real estate loans.
“Clearly there is a great deal of uncertainty in the market,” said panel host Derek Ezovski, Managing Director of EDR's Commercial Property Due Diligence Services. “Environmental due diligence is particularly important right now. With fewer deals, lenders are scrutinizing deals much closer than they have in the past, so project risk will go up higher as long as the economy remains uncertain.”
About EDR
Environmental Data Resources Inc. (EDR) is the leading national provider of environmental information services in the United States. As the innovator of the most comprehensive and accurate database of environmental and historical land use information, the company provides reports, subscription services and other solutions to help its customers assess and manage environmental risk. EDR customers include commercial and residential real estate professionals, environmental consultants, lenders, corporations, attorneys and government agencies. Established in 1991, EDR is headquartered in Milford, Connecticut with regional offices located throughout the United States. EDR is wholly owned by DMG Information Inc., the business information division of Daily Mail and General Trust, plc (DMGT). For more information, visit http://www.edrnet.com/.
SOURCE Environmental Data Resources Inc.
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