{"id":1004676243,"date":"2023-08-15T05:27:26","date_gmt":"2023-08-15T13:27:26","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004676243"},"modified":"2023-08-25T04:05:17","modified_gmt":"2023-08-25T12:05:17","slug":"sluggish-cre-lending-persists-cbre","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/","title":{"rendered":"Sluggish CRE Lending Persists: CBRE \u00a0"},"content":{"rendered":"
\"\"<\/a>

For the fifth consecutive quarter, banks accounted for the largest share of non-agency loan closings. Chart courtesy of CBRE<\/em><\/p><\/div>\n

In the face of market uncertainty, CRE lending slowed in the second quarter, according to CBRE. The company\u2019s Lending Momentum Index<\/a> fell from 204 in the first quarter to 193 in the second quarter, representing declines of 5.4 percent from the first quarter and 52.2 percent year-over-year.<\/p>\n

The CBRE Lending Momentum Index tracks the pace of CBRE-originated commercial loan closings in the United States.<\/p>\n

Although debt is readily available, “choppy” markets have curtailed lending volume, noted Rachel Vinson, CBRE’s president of debt and structured finance for U.S. capital markets, in a prepared statement. That is moving borrowers to shorter-term fixed loans, as higher borrowing costs are keeping many on the sidelines, she added.<\/p>\n

\"\"<\/a>

Many borrowers are turning to fixed-rate, short-term loans, according to Rachel Vinson, president of debt and structured finance for CBRE’s U.S. capital markets unit. Image courtesy of CBRE<\/em><\/p><\/div>\n

For the fifth straight quarter, banks constituted the largest share of CBRE’s non-agency loan closings, at 43.4 percent of the total in the second quarter, up slightly from 41 percent in the first quarter.<\/p>\n

\u201cSmaller regional and local banks were the most active in this space, with 25% of bank loans used to fund construction projects, mostly in the industrial sector,\u201d CBRE reported. \u201cApproximately 43% of the loans were refinancings, while the remainder was allocated for acquisition loans.\u201d<\/p>\n

Life companies too grew their share, accounting for 26.8 percent of closed non-agency loans, up from 23 percent in the first quarter; these were focused on permanent multifamily and industrial loans.<\/p>\n

Alternative lenders, including debt funds and mortgage REITs, were responsible for 26 percent of closings in the second quarter, a substantial increase from 20.1 percent in the first quarter. CBRE noted, however, that they \u201cfaced challenges on floating-rate bridge loans amid wider spreads and interest rate cap costs.\u201d<\/p>\n

Underwriting and CMBS<\/h2>\n
\"\"<\/a>

CBRE’s lending momentum index declined 52.2 percent year-over-year in the second quarter. Chart courtesy of CBRE<\/em><\/p><\/div>\n

Underwriting criteria stayed tight in the second quarter, according to CBRE, \u201cwith slightly lower underwritten cap rates, debt yields and interest rates than last quarter.\u201d<\/p>\n

The average underwritten cap rate increased by 43 basis points in the second quarter, to 5.52 percent, from a year earlier, and average loan constants rose to 6.61 percent, from 5.43 percent, over the same period.<\/p>\n

Notably, the percentage of partial- or full-term interest-only loans hit a record-high 82.1 percent in the second quarter, although other key underwriting measures saw little change.<\/p>\n

Collateralized loan obligations dropped to just $2.1 billion in the first half, compared to nearly $24 billion in the first half of last year.<\/p>\n

CMBS conduit lending sank to 3.8 percent of non-agency loan volume in the second quarter, from 15.7 percent in the first quarter. Industrywide, CMBS origination totaled only $16.5 billion in the first half, against $49.9 billion a year prior.<\/p>\n","protected":false},"excerpt":{"rendered":"

Banks accounted for the biggest share of non-agency closings. <\/p>\n","protected":false},"author":882,"featured_media":1004676269,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21825,22251,21783,23891,21742,51037],"tags":[],"class_list":["post-1004676243","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-finance","category-in-focus","category-investment","category-national","category-latest","category-trends"],"acf":[],"yoast_head":"\nSluggish CRE Lending Persists: CBRE \u00a0 - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sluggish CRE Lending Persists: CBRE \u00a0\" \/>\n<meta property=\"og:description\" content=\"Banks accounted for the biggest share of non-agency closings.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2023-08-15T13:27:26+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2023-08-25T12:05:17+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/CBRE-Chart2-Feature.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"800\" \/>\n\t<meta property=\"og:image:height\" content=\"602\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Scott Baltic\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/\",\"name\":\"Sluggish CRE Lending Persists: CBRE \u00a0 - Commercial Property Executive\",\"isPartOf\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/CBRE-Chart2-Feature.jpg\",\"datePublished\":\"2023-08-15T13:27:26+00:00\",\"dateModified\":\"2023-08-25T12:05:17+00:00\",\"author\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/#\/schema\/person\/61ac1450f3ffaa0e850b834c28526555\"},\"breadcrumb\":{\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.commercialsearch.com\/news\/sluggish-cre-lending-persists-cbre\/#primaryimage\",\"url\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/CBRE-Chart2-Feature.jpg\",\"contentUrl\":\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2023\/08\/CBRE-Chart2-Feature.jpg\",\"width\":800,\"height\":602,\"caption\":\"For the fifth consecutive quarter, banks accounted for the largest share of non-agency loan closings. 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