CBRE: Lending Momentum Continued to Slow in Q1
Stress in the banking system and financial market volatility continued to slow commercial real estate lending activity in the first quarter of 2023, according to the latest research from CBRE.
The CBRE Lending Momentum Index, tracking the pace of CBRE-originated commercial loan closings in the U.S., declined by 33% from Q4 2022 and 53.5% from a year earlier. The index closed Q1 at a value of 204.
“The Federal Reserve’s commitment to reduce inflation with aggressive rate hikes continued to heighten market uncertainty through the first quarter. While plenty of debt capital remains available, increased borrowing costs coupled with credit tightening continues to put downward pressure on lending activity,” said Rachel Vinson, president of debt & structured finance, U.S. for capital markets at CBRE.
She continued, “Borrowers will continue to opt for shorter-term, fixed-rate debt with shortened call protection until volatility begins to normalize.”