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CRE Lending Momentum Picked Up Speed in Q4 2024
Commercial real estate lending momentum accelerated in the fourth quarter of 2024 with maturing debt expected to drive further improvement in 2025, CBRE reported. The CBRE Lending Momentum Index, tracking the pace of CBRE-originated commercial loan closings in the U.S., rose by 21% from Q3 2024 and 37% year-over-year. The index closed Q4 2024 at a value of 259, well above the five-year pre-pandemic average of 229.
In Q4 2024, the average spread on closed commercial mortgage loans was 184 basis points, a 49-bp decline Y-O-Y and a one-bp increase from Q3. Spreads on multifamily loans narrowed by 12 bps during the quarter to 156 bps for the tightest spreads since Q1 2022.
“While there was an uptick in market activity in the fourth quarter, the 80-bp shift in 10-year Treasury rates and revised rate expectations led to recalibrations in credit and equity, resulting in the deferral of some deals,” said James Millon, U.S. president of Debt & Structured Finance for CBRE. “Despite this, a substantial wall of capital continues to support competitive spreads across a wide spectrum of credit markets, from CMBS SASB and conduit to CLOs, agency, LifeCo, bank, repo and debt funds.”
In the year ahead, he continued, “we expect a more dynamic refinancing and investment sales market, fueled by maturing debt, capital reallocation in closed-end funds, and strong fundamentals across most real estate sectors.”
- ◦Financing
