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Lending Momentum Expected to Remain “Muted” for Near Term
The CBRE Lending Momentum Index, tracking the pace of commercial loan closings in the U.S., reached a value of 194 in June—a 29.3% decrease from its first-quarter close and down 20.5% from a year ago. A temporary freeze in commercial real estate lending from mid-March through early April meant fewer loan closings in Q2.
Broad liquidity was restored later in Q2, while multifamily agency and certain industrial deals were bright spots. Yet, other sectors suffered from selectivity and the withdrawal of CMBS and alternative sources of capital.
“While we have seen a steady improvement in the number of loan applications over the past five weeks, we anticipate that commercial mortgage markets will remain muted over the near term, especially for retail and hospitality properties, as well as value-added deals, which face the greatest underwriting challenges,” said Brian Stoffers, CBRE’s global president of debt & structured finance for capital markets.
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