During the height of the COVID pandemic in 2020, everything in our lives shifted quickly and dramatically, but one industry that took a big hit is commercial real estate. As many Americans began working from home full time, retail and office spaces saw a sharp decrease in occupancy. Hotels also suffered as occupancy decreased by 305% from November 2019 to November 2020.
While residential real estate lending was plugging along at a regular rate due to early adoption of new technologies, commercial lending suffered as it still runs on procedures that have not been updated in decades. As recently as 2019, 43% of US banks still used COBOL. COBOL programming was created before the internet came into play, which makes it difficult for this antiquated system to be compatible with newer technology.
Commercial lending needs to step up to the plate and begin functioning with modern methods for the modern world.
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