The following summary of our early 2012 report on apartment lending trends captures some of the emerging issues facing the sector's lenders. Contact us for the findings of our most recent assessment of lender risk-taking and long-term apartment loan performance projections.

Price Distortions and Interest Rate Risks in Apartment Financing

Apartment Loans by Fannie Mae, Freddie Mac Creating Bubble, Chandan Finds | by Oshrat Carmiel

Bloomberg writes | Low-cost financing backed by the US government is inflating the values of apartment buildings and threatening to create a bubble, according to a report by Chandan Economics. Multifamily loans issued by government-sponsored agencies Fannie Mae and Freddie Mac are buoying the price of apartment buildings to the point that buyers may not be able to refinance once interest rates rise.

Apartments Losing Their Luster For Some Investors | by Matthew Strozier and Dawn Wotapka

The Wall Street Journal writes | Apartment buildings, one of the best-performing sectors of the commercial real-estate market in recent years, are starting to lose some of their appeal for investors ... But this year, the excitement is fading. Investors are pushing back on property prices, rent growth is slowing and yields are flattening in some markets.

Commercial Property Lending Up for First Time in Two Years | by Carisa Chappell

NAREIT writes: Banks in the United States have increased their lending to commercial real estate projects, according to an analysis of lending and default statistics from the fourth quarter of 2011. It marked the first time that bank lending has spiked upward since the first quarter of 2010, according to Sam Chandan, president and chief economist at Chandan Economics, which performed the analysis.

An increasing number of banks returned to commercial real estate markets in the fourth quarter, pushing net lending on multifamily and commercial properties higher for the first time since Q1 2010. Of 365 institutions with $1 billion or more in overall lending and at least $100 million in commercial real estate loans, 197 increased their exposure.

US Banks Increase Commercial Property Lending for First Time Since 2010 | by Hui-yong Yu

Bloomberg writes: US banks increased financing for commercial real estate in the fourth quarter for the first time in almost two years as default rates dropped and lenders shed more foreclosed properties, Chandan Economics said. Balances on loans for properties including office buildings and shopping malls rose by $3.69 billion after falling for six consecutive quarters.