Bank of Boston Corp. recently closed a $150 million real estate loan to Excel Realty Trust, a San Diego retail property investor.

And Bankers Trust New York Corp. is expected to close a $66 million construction loan for an 800-room Loews hotel in Miami Beach.

Along with countless smaller loans, these deals are part of a major revival in real estate lending that appeared to gain momentum last year and that bankers expect to continue through 1996.

"We have had a very good year," said William R. Nicholson, director of commercial real estate at Barnett Banks Inc. "We see continued appropriate competition for high-quality transactions. And we continue to think the marketplace is rational in terms of supply continuing to come into balance with demand, particularly with office space."

The banking industry's total real estate portfolio grew by $12.2 billion to $409.5 billion in the first six months of the year. The growth continued a trend that started in 1994, after banks finished writing off and selling the bad debts of the 1980s.

A revival this soon after the real estate bust would have seemed unlikely. But experts say new life has been pumped into the sector by demand for higher-yielding assets on the part of investors and bankers and by a steady recovery in occupancy levels for most property types after new construction ground to a halt.

"It's not like 1984 to 1986, but if you have decent property you can get debt," said Dennis P. Yeskey, managing director of New York-based Deloitte & Touche's tri-state real estate practice.

Mr. Yeskey said the yield spread between real estate issues and comparable treasuries had shrunk from a peak of about 350 basis points to less than 150 basis points by the beginning of 1995, an indication of firmer demand for the debt. At the same time, a strong influx of capital has helped drive up property values, he said.

Long-term institutional investors who had pulled back in the early part of the decade, sticking the banks with a glut of maturing real estate debt at the worst possible time, also have returned to the market. The American Council of Life Insurance expects to report a "slight increase" for 1995 in the industry's commercial real estate mortgage holdings, a spokesman said. The life companies' holdings of commercial mortgages stood at $197.8 billion at yearend 1994, down from a peak of $243.0 billion in 1990.

And pension funds also are increasing their allocation to real estate.

Bankers are quick to point out that the lending is on much more conservative terms these days, and that the loans are either for refinancing or acquisitions, rather than more-risky construction.

"The underwriting has remained fairly conservative," said Matthew E. Galligan, managing director at Bank of Boston. "We all worry about that. The thing that is very different this time around is that real estate investment trusts have brought equity in and that has stabilized values."

Most financings include 40% or more of equity, Mr. Galligan said, adding, "We have not experienced that in prior periods in my career."

Mr. Galligan noted "tremendous demand for the right kind of deal" among bankers, pointing out that the syndication of the Excel loan was completed in three weeks - about half the time usually required.

The unsecured two-year revolving loan will enable the REIT to refinance existing debt. Bank of Boston, the agent, and co-agents First Interstate Bancorp and Wells Fargo & Co. are taking $26.667 million apiece.

Dresdner Bank took $25 million of the loan and NBD Bancorp $20 million, with Signet Banking Corp. and Germany's BHF-Bank each taking $10 million.

The hotel loan by Bankers Trust could mark a major turning point. It is the first major hotel construction loan since the market crashed.

Bankers Trust managing director Robert S. Blumenthal has said at industry conferences that a somewhat larger bank group would be needed for the $66 million loan than would have been required in the go-go '80s. Also in contrast to the boom years, when loans sometimes exceeded construction costs, the construction cost is well in excess of the loan at $111 million. And that figure does not include the cost of land and parking - being contributed by the city of Miami Beach.

Mr. Yeskey at Deloitte & Touche warned banks to be cautious as they reenter the market, but said that market conditions are favorable for the time being.

How will bankers know when that is about to change? Mr. Yeskey said one sign that the market is about to over overheat is a proliferation of construction cranes.

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