Office space, retail a worry for lenders

Experts are predicting a tough year ahead for the commercial real estate sector, especially in offices, retail and condo developments. Office vacancy rates are increasing in many areas with the oil-producing provinces most effected. “We do have some concerns about the fundamentals right across the country right now,” Jeremy Wedgbury, managing director of mortgage lender First National Financial told the RealCapital real estate conference in Toronto. The lender is tightening restrictions on some types of commercial loans. Others expressed concern about the high valuations of land and properties in BC: “hard to fathom” said RBC’s John Miron.  Meanwhile the head of commercial mortgages at Sun Life expressed “concern” about where Canada’s real-estate cycle is currently.

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