CBRE Sees Commercial Loan Closings Down 27% as 2022 Ends
The CBRE Lending Momentum Index, tracking the pace of CBRE-originated commercial loan closings in the U.S., declined by 15% in the fourth quarter of 2022 from Q3 and 27% year-over-year. The index closed Q4 2022 at a value of 305, and CBRE cited heightened market volatility amid higher interest rates.
“The Federal Reserve’s commitment to reduce inflation with aggressive rate hikes continues to heighten market uncertainty, as borrowing costs increase and a lack of price discovery persists,” said. Rachel Vinson, president of debt & structured finance, U.S. for capital markets at CBRE. “While there is plenty of debt capital available waiting to deploy, fewer borrowers are willing to transact unless they have to.”
She added, “We are seeing increased activity from private capital, as well as regional and local banks. We expect demand for shorter-term, fixed-rate debt with shortened call protection to endure well into the second half of 2023.”