Loan Slowdown Expected Following Strong Q1 Momentum
As risks to the U.S. economy from the COVID-19 pandemic emerged in mid-March, commercial real estate lending markets began to navigate a period of price discovery, according to a CBRE report. Loan closings remained at high levels in the first quarter, reflecting the strong market conditions prior to the disruption of activity as Q1 drew to a close.
The CBRE Lending Momentum Index, which tracks the pace of commercial loan closings in the U.S., reached a value of 275 in March—a 4.5% increase from its Q4 2019 close and up 15% from a year ago. With the deal pipeline slowing in April, a decline in lending momentum is anticipated in Q2.
“We expect balance sheet lenders, such as banks and life companies, along with the agencies, to continue to offer loan quotes on a selective basis,” said Brian Stoffers, CBRE’s global president of debt & structured finance for capital markets.
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