The outbreak of the novel coronavirus disease COVID-19, and the efforts to contain it, is responsible for massive economic disruption, with significant impacts on the commercial real estate sector. Unlike during the global financial crisis of a decade ago, however, the lending market has been supported by a rapid response from central bankers and widespread fiscal stimulus.

“It’s important to note, however, that while interest rates have gone down, the overall cost of capital has gone up,” says Charles Krawitz, vice president, commercial lending and loan trading at Alliant Credit Union. “So while pricing is still attractive, it is not as attractive as some borrowers expect based purely on where Treasuries stand.”

He notes the CMBS market has largely shut down, causing some dislocation and reducing competition among those lenders still in the market. Barriers to travel have meant out-of-town lenders are unable to handle in-person property inspections. Instead,