Banks will remain the primary source of debt for commercial real estate with the exception of multifamily that has agency lending. Life insurance companies are returning to the markets but have limited capacity. The securitized debt market will return in time but has a long ways to go.

Banks currently have 95% of TARP (Troubled Asset Relief Program) and other government money still sitting on their books. They are likely to begin writing off some of their losses on distressed assets in 2010 as their capital reserves return to health which will translate of the deployment of capital in the form of new loans.

Interest rates are projected to increase by 25-50 bps in 2010.

Government sponsored enterprises (GSEs) continue to provide liquidity to senior housing and multifamily. Most loans involving GSEs have been refinancing with properties needing to be stabilized and loan to values of 70% to 75%.

More than 50% of closed commercial transactions in 2009 involved seller and/or assumable financing.