The CBRE Lending Momentum Index, tracking the pace of commercial loan closings in the U.S., reached a value of 221 in December, up by 38.2% from September. However, the index was still down 16% from a year ago as the fourth quarter ended.
"Capital markets helped bolster commercial mortgage lending at year-end as equity prices rose and corporate loan spreads tightened,” said Brian Stoffers, global president of debt & structured finance for capital markets at CBRE. “With lending markets anticipating the effects of additional government economic stimulus on growth and inflation, Q4 2020 saw increased participation by alternative lenders and life companies compared with Q3.”
As capital availability improved in Q4, lenders granted generally higher loan proceeds and underwriting standards were slightly less restrictive. Average loan-to-value ratios increased for permanent commercial and multifamily loans after reaching lows in Q3 that haven’t seen since the Global Financial Crisis.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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