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Commercial Real Estate Loans - Categorization of an Investment Segment

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  • Beate Monika Philipps

    (Mendel University in Brno, Czech Republic)

Abstract

Commercial real estate loans (CREL) are a modern essential business segment and of major relevance to the financial stability of an economy as they interconnect the financial markets and the real economy. Consequently, CREL are of specific interest to regulatory authorities. As far as the author knows, there exists no universal definition of CREL in the global financial industry and the regulatory environment. This has been subject to criticism due to resulting gaps and bias in data generated by regulatory filing. This study contributes to academia and applied sciences by providing the missing link. It develops a comprehensive categorization of CREL on a foundation of 34 sources predominately provided by regulatory authorities in the US and the EU. The categorization is based on a qualitative synthesis of main CREL characteristics of this particular heterogeneous asset class outlined in the detected sources. The objective of this work is to support the development of a common understanding of this investment segment among banks, institutional investors and regulatory authorities in order to allow an accurate and prompt filing.

Suggested Citation

  • Beate Monika Philipps, 2021. "Commercial Real Estate Loans - Categorization of an Investment Segment," European Journal of Business Science and Technology, Mendel University in Brno, Faculty of Business and Economics, vol. 7(1), pages 5-26.
    • Handle: RePEc:men:journl:v:7:y:2021:i:1:p:5-26
    DOI: 10.11118/ejobsat.2021.001
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    References listed on IDEAS

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    1. Ambrose, Brent W & Benjamin, John D & Chinloy, Peter, 2003. "Bank and Nonbank Lenders and the Commercial Mortgage Market," The Journal of Real Estate Finance and Economics, Springer, vol. 26(1), pages 81-94, January.
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    4. Lamont Black & John Krainer & Joseph Nichols, 2017. "From Origination to Renegotiation: A Comparison of Portfolio and Securitized Commercial Real Estate Loans," The Journal of Real Estate Finance and Economics, Springer, vol. 55(1), pages 1-31, July.
    5. Bradford Case, 2003. "Loss characteristics of commercial real estate loan portfolios," Basel II White Paper 1, Board of Governors of the Federal Reserve System (U.S.).
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    financial economics; commercial real estate loans; investment decision; risk management;
    All these keywords.

    JEL classification:

    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • R33 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Nonagricultural and Nonresidential Real Estate Markets

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