It’s not a big hook to hang a hat on, but the small increase in some commercial real estate loan balances on bank books at the end of the year serves as yet another indication of thawing lending markets for property investors.

Overall loan balances on bank books posted their largest real growth in four years, according to year-end numbers released this past week by the Federal Deposit Insurance Corp. (FDIC).

As far as CRE lending goes, it was a 50/50 split between good and bad news. Total loans outstanding for owner-occupied CRE and multifamily properties saw a modest increase year over year — from $452.6 billion to $457.2 billion for owner-occupied and from $212.7 billion to $218.5 billion for multifamily.

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According to the Calkain Companies, net lease cap rates fell by 25 basis points in 2011. The primary drivers of this trend are lack of product (especially high quality product) and an ease in lending conditions. Construction of new net lease product continues to flow at a trickle while financing has become more available – with local and regional banks competing with insurance companies for credit tenant deals. Investors have shown a willingness and ability to invest but are hindered by lack of product to satiate their demand. This lack of supply and increase in demand has forced prices up and cap rates down – many would argue that 2012 promises to be a seller’s market.

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Retail property rents are expected to begin to rise later this year as demand for store space in shopping centers and malls slowly soaks up available space and, combined with the dearth of new space under development, finally tips the supply and demand balance.

Improvements in market fundamentals are starting to spread into secondary markets and smaller shopping centers typically occupied by Mom-and-Pop businesses, according to CoStar’s 2011 Retail Review & Outlook, presented by Senior Real Estate Strategist Suzanne Mulvee and Real Estate Economist Ryan McCullough.

Despite the overall positive signs, market economists remain cautious in the face of the muted overall demand for retail space.

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As economic headwinds subside, the commercial real estate lending business for U.S. banks has hit an inflection point. For the first time in five years, a majority of banks are finally talking about their ability to grow their loan portfolios.

While the sentiment among banks is neither unanimous, nor the projected lending growth strong, bank executives in analyst earnings calls over the past couple of weeks were clearly signaling they believe they are on the other side of writedowns and are ready to return to CRE lending.

As bankers see it, they have worked through most of the troubles tied to real estate over the last few years, and now view that segment as one that represents a great amount of potential for earning’s growth.

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The National Council of Real Estate Investment Fiduciaries (NCREIF) has released fourth quarter 2011 results of the NCREIF Timberland Index. The fourth quarter 2011 Timberland index reported a total return of 0.51%, comprised of 0.56% income and a (0.05%) capital appreciation return. This compares to a (0.35%) total return in the third quarter and (0.79%) in the fourth quarter 2010. For the year, Timberland returned 1.57%, a nice contrast to 2010 and 2009 when returns were (0.15%) and (4.75%), respectively.

Unfortunately, capital appreciation remained negative for the fifth time in six quarters. On the bright side, this was the smallest drop in value since the first quarter 2011 and the third best quarterly appreciation return in the past three years. Until the economy grows at a faster pace and the housing market improves, the timber returns will have difficulty showing strong positive results. The increase in multi‐family construction is helping the market and single family starts are up slightly, both those factors should help returns eventually.

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Sales of new single-family houses in December 2011 were at a seasonally adjusted annual rate of 307,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 2.2 percent (±13.2%)* below the revised November rate of 314,000 and is 7.3 percent (±16.6%)* below the December 2010 estimate of 331,000.

The median sales price of new houses sold in December 2011 was $210,300; the average sales price was $266,000. The seasonally adjusted estimate of new houses for sale at the end of December was 157,000. This represents a supply of 6.1 months at the current sales rate.

An estimated 302,000 new homes were sold in 2011. This is 6.2 percent (±3.6%) below the 2010 figure of 323,000.

Despite survey after survey showing that consumers expect home prices to continue to decline next year, most home owners still believe their houses are worth more than what their agents recommend.

Nearly three out of four home owners, 76 percent, believe their homes are worth more than the recommended agent listing price. By contrast, 68 percent of home buyers believe homes are overpriced, according to the latest HomeGain. Thirty-two percent said homes are overpriced by more than 10 percent.

The gap between what sellers expect and what agents recommend has actually grown slightly over the past year even though national median prices have declined about 4-7 percent this year. A year ago, some 73 percent of owners thought their homes were worth more than their agent’s recommended listing price and 69 percent of buyers thought homes were overpriced.

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Will the Obama administration’s upcoming plans to sell REOs in bulk to mega-investors at deep discounts siphon away hundreds of millions of dollars in commissions to real estate brokers who now sell — or assist buyers to acquire — foreclosed properties held by Fannie Mae, Freddie Mac and FHA?

Will the new approach to REO (“real estate owned”) be bad news for small-scale investors who no longer will be able to compete because entire chunks of the agencies’ portfolios will be stamped “for bulk only”? Won’t this further the impression that Washington favors the fats cats on Wall Street over Mom and Pop on Main Street?

And what about the community impacts on local governments and nonprofits who want to stabilize neighborhoods by putting new owners into vacant foreclosures, rather than filling them with renters brought in by distant bulk buyers?

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Banks and life insurance companies stepped up lending on commercial properties in the third quarter of this year, according to the most recent survey from the Mortgage Bankers Association (MBA), an industry trade group. And retail was among the more favored asset classes, with the MBA’s origination volume index for retail properties increasing 164 percent from the third quarter of 2010. The only asset type to experience a greater origination uptick was hospitality, with a 406 percent change from the third quarter of last year.

What’s more, loan originations for retail properties increased 37 percent between the second and third quarters of 2011. The average loan size on retail assets also went up to $20.9 million, from $15 million in the first quarter.

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PKF Hospitality Research (PKF-HR) has released their preliminary Hotel Horizons® updated forecast for the U.S. lodging industry. Based on performance data through September of 2011 (provided by Smith Travel Research), and Moody’s Analytics’ October 2011 domestic economic forecast, PKF-HR believes that RevPAR in the U.S. will increase by 8.1 percent in 2011, and rise another 6.2 percent in 2012.

“The ongoing recovery of U.S. hotels in 2011 has continued to slightly outpace our forecasts. The 8.1 percent revised RevPAR forecast for the current year represents a 90 basis point increase over our previous forecast released earlier this year,” said R. Mark Woodworth, President of PKF-HR.

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As the holiday shopping season draws near, the weaker retail chains will be facing their hour of reckoning, with their sales growth during the November/December period determining their ability to survive. And while most retailers have already closed their worst performing stores and made their operations as lean as possible over the past few years, the uncertain economic climate might lead to a substantial number of store closures in the first quarter of 2012.

By conservative estimates, next year will likely bring more than 5,000 store closings, says Michael S. Wiener, president and CEO of Excess Space Retail Services Inc., a national consulting and advisory firm specializing in disposition and lease restructuring. And that’s not counting closings related to bankruptcies and liquidations.

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Despite the Standard & Poor’s downgrade of U.S. debt, a worsening European sovereign debt crisis and rising stock market volatility, the U.S. economy continues to expand and create new jobs, supported by strong consumer spending and business investment.

Over the past 12 months (as of the end of October), payroll employment has increased by an average of 125,000 jobs per month. However, the pace is not fast enough to lower the unemployment rate. As a result, we do not expect employment to return to its prior peak until 2016. Overall, employment growth appears to be strong in health care, high tech and energy, but is disappointing in finance, government and construction.

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NIC MAP has published 3Q11 NIC MAP reports and data.

Stronger absorption drove occupancy for seniors housing up to 88.1% in 3Q11. The occupancy rate, which now has risen for six consecutive quarters, rose 20 basis points from 2Q11 and is 100 basis points above its cyclical low of 87.1% in 1Q10.

The occupancy rate for independent living properties in 3Q11 was 87.9%, and the occupancy rate for assisted living properties was 88.6%. Both property types showed improvement from the 2Q11 occupancy rates of 87.5% and 88.5%, respectively.

“With occupancy having risen each quarter since 1Q10, it is evident that we are past the bottom and are clearly in the recovery stage,” says Michael Hargrave, vice president – NIC MAP.