Lenders in the U.S. commercial real estate market are starting to loosen their purse strings as competition between insurance companies and investment banks picks up, Reuters reported.

The rivalry, according to one insurance executive, may possibly lead to diminished loan quality in the market, which continues to be overwhelmed by decreasing values and property revenues.

“I don’t think underwriting has eroded significantly so far,” said Mark Davis, a senior managing director at Allstate Investments LLC. “So I think the quality of loans that have gotten done is still good. But I’m concerned when I see the trend that people are being very, very competitive for loans.”

An unidentified JPMorgan Chase & Co. lender suggested his group is going through a “rationalization” of whether to take on more risk. Easing underwriting guidelines on properties with slightly more debt, he said, could make sense.

The two views signify a debate about the state of the commercial real estate market, the health of which is important for an overall economic rebound.

Defaults in the sector are expected to exceed 10 percent due to weak cash flows and the inability of some borrowers to refinance debt as it matures.

“Most institutions are still holding a significant amount of legacy assets that have to be dealt with in one way or another,” Davis said. “So when you add up all those factors, that’s why I’m always surprised at how quickly the money has come back to the market.”