CRE Lenders See Market Stabilizing as 2024 Progresses

Commercial and multifamily mortgage originators continue to experience an unsettled market for borrowing and lending but anticipate those conditions will stabilize over the course of 2024. That’s according to the Mortgage Bankers Association’s (MBA) 2024 Commercial Real Estate Finance Outlook Survey, released Tuesday.

Among the highlights of the survey are the following:

More than 90% of respondents consider today’s market either somewhat or very unsettled.

Among property types, the office market is viewed as most negatively affecting today’s borrowing and lending. Meanwhile, half of respondents view the industrial outlook as having positive impacts.

Cap rates and valuations, base interest rates and rate volatility all are viewed as having negative impacts on today’s financing activity.

Originators expect the market to stabilize over the course of 2024.

In 2024, lenders are expected to have a (slightly) stronger appetite to lend than borrowers will have to borrow.

Borrowing and lending volumes are generally expected to rise in 2024.

Expectations for particular capital sources vary broadly.

“Commercial real estate markets are entering 2024 amid a great deal of uncertainty and, as a result, a significant slowdown in activity,” said Jamie Woodwell, MBA’s head of commercial real estate research. “Leaders of top commercial real estate finance firms believe that a host of factors may continue to act as a drag – rather than a boost – to the markets. However, they do believe that overall uncertainty will dissipate over the year, helping to boost borrowing and lending above 2023 levels.”

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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