{"id":1004805597,"date":"2026-07-16T05:43:38","date_gmt":"2026-07-16T13:43:38","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004805597"},"modified":"2026-07-16T05:43:40","modified_gmt":"2026-07-16T13:43:40","slug":"crefc-rate-volatility-remains-top-of-mind-for-executives","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/crefc-rate-volatility-remains-top-of-mind-for-executives\/","title":{"rendered":"CREFC: Rate Volatility Remains Top of Mind for Executives"},"content":{"rendered":"\n<p><\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a58f49044996&quot;}\" data-wp-interactive=\"core\/image\" class=\"alignright size-large is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"800\" height=\"620\" data-attachment-id=\"1004575204\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/crefcs-lisa-pendergast-on-whats-ahead-for-the-cre-clo-market\/pendergastlisa-57733-2469\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg\" data-orig-size=\"800,620\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;8&quot;,&quot;credit&quot;:&quot;Dupont Photographers&quot;,&quot;camera&quot;:&quot;Canon EOS 5D Mark III&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;1474019295&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;88&quot;,&quot;iso&quot;:&quot;100&quot;,&quot;shutter_speed&quot;:&quot;0.00625&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;1&quot;}\" data-image-title=\"Lisa Pendergast, Executive Director, CREFC. Image courtesy of CREFC\" data-image-description=\"&lt;p&gt;Image courtesy of CREFC&lt;\/p&gt;\n\" data-image-caption=\"&lt;p&gt;Lisa Pendergast, president &#038; CEO, CREFC. &lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg?w=800\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg?w=800\" alt=\"Lisa Pendergast of CREFC\" class=\"wp-image-1004575204\" style=\"width:400px\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg 800w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg?resize=300,233 300w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2022\/04\/PendergastLisa-57733-2469.jpg?resize=768,595 768w\" sizes=\"auto, (max-width: 800px) 100vw, 800px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">&#8220;CREFC\u2019s Board of Governors clearly believe that the rate environment is unlikely to change for the better,&#8221; Lisa Pendergast, president and CEO of CREFC, told <em>CPE.<\/em> <\/figcaption><\/figure><\/div>\n\n\n<p>Commercial real estate finance executives continue to express concerns over interest rate and cap rate uncertainty and their impact on CRE lending and investment for the second half of 2026, according to the CRE Finance Council.<\/p>\n\n\n\n<p>The concerns came through in both the core and topical questions asked by CREFC in its Second-Quarter 2026 <a href=\"https:\/\/assets.informz.net\/cmbs\/data\/images\/CREFC_2Q26%20BOG%20Survey%20Results.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Board of Governors Sentiment Index<\/a> survey results.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.commercialsearch.com\/news\/fed-holds-rates-again-as-warsh-steps-in\/\">Interest rates<\/a> remained the most negative core question for the second consecutive quarter. A majority, 53 percent, expect a negative impact from elevated mortgage and cap rates, while 37 percent are neutral and 11 percent expect a positive impact.<\/p>\n\n\n\n<p>Asked which rate-related factor will most constrain CRE lending and investment in the second half of the year, respondents split almost evenly between rate volatility and uncertainty about the path (47 percent) and rates staying higher for longer (45 percent).<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p><strong>READ ALSO:<\/strong> <a href=\"https:\/\/www.commercialsearch.com\/news\/reading-the-rate-map\/\">Reading the Rate Map<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p>When combined, that means 92 percent of the respondents chose either the level or the volatility of rates as the binding constraint on activity in the second half of this year.<\/p>\n\n\n\n<p>\u201cCREFC\u2019s Board of Governors clearly believe that the rate environment is unlikely to change for the better, barring any unforeseen issues that may cause a significant downturn in the economy and thus the increased likelihood of Fed easing,\u201d Lisa Pendergast, president and CEO of CREFC, told <em>Commercial Property Executive.<\/em><\/p>\n\n\n\n<p>Pendergast referred to the $875 billion in CRE loans set to mature in 2026 and noted that the current rate environment suggests it will be challenging to refinance those loans given the elevated benchmark and mortgage rates.<\/p>\n\n\n\n<p>\u201cThink of loans maturing with a 4 percent coupon going to 6 percent or higher,\u201d she said, adding the elevated volume of maturing loans continues through 2027 and 2028 at $652 billion and $591 billion respectively.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-sentiment-improves-but-members-still-cautious\">Sentiment improves, but members still cautious<\/h2>\n\n\n\n<p>Overall, the sentiment index rose 0.9 percent to 101.0 from 100.1 in the first-quarter survey. That\u2019s near the survey\u2019s fourth-quarter 2017 baseline of 100.0 after the prior quarter\u2019s 20.2 percent decline.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;6a58f490462da&quot;}\" data-wp-interactive=\"core\/image\" class=\"aligncenter size-large is-resized wp-lightbox-container\"><img loading=\"lazy\" decoding=\"async\" width=\"595\" height=\"520\" data-attachment-id=\"1004805598\" data-permalink=\"https:\/\/www.commercialsearch.com\/news\/crefc-rate-volatility-remains-top-of-mind-for-executives\/crefc-sentiment-survey-q2-2026\/\" data-orig-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2026\/07\/CREFC-Sentiment-Survey-Q2-2026.png\" data-orig-size=\"595,520\" data-comments-opened=\"0\" data-image-meta=\"{&quot;aperture&quot;:&quot;0&quot;,&quot;credit&quot;:&quot;&quot;,&quot;camera&quot;:&quot;&quot;,&quot;caption&quot;:&quot;&quot;,&quot;created_timestamp&quot;:&quot;0&quot;,&quot;copyright&quot;:&quot;&quot;,&quot;focal_length&quot;:&quot;0&quot;,&quot;iso&quot;:&quot;0&quot;,&quot;shutter_speed&quot;:&quot;0&quot;,&quot;title&quot;:&quot;&quot;,&quot;orientation&quot;:&quot;0&quot;}\" data-image-title=\"CREFC-Sentiment-Survey-Q2-2026\" data-image-description=\"&lt;p&gt;Used with permission from report.&lt;\/p&gt;\n\" data-image-caption=\"&lt;p&gt;CREFC&#8217;s sentiment index rose 0.9 percent to 101.0 from 100.1 in the first-quarter survey. Image courtesy of CREFC&lt;\/p&gt;\n\" data-large-file=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2026\/07\/CREFC-Sentiment-Survey-Q2-2026.png?w=595\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on-async--click=\"actions.showLightbox\" data-wp-on-async--load=\"callbacks.setButtonStyles\" data-wp-on-async-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2026\/07\/CREFC-Sentiment-Survey-Q2-2026.png?w=595\" alt=\"A chart from CREFC's second-quarter 2026 sentiment survey.\" class=\"wp-image-1004805598\" style=\"width:599px;height:auto\" srcset=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2026\/07\/CREFC-Sentiment-Survey-Q2-2026.png 595w, https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2026\/07\/CREFC-Sentiment-Survey-Q2-2026.png?resize=300,262 300w\" sizes=\"auto, (max-width: 595px) 100vw, 595px\" \/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on-async--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><figcaption class=\"wp-element-caption\">CREFC&#8217;s sentiment index rose 0.9 percent to 101.0 from 100.1 in the first-quarter survey. <em>Image courtesy of CREFC<\/em><\/figcaption><\/figure><\/div>\n\n\n<p>The survey was conducted from June 25 through July 6 and captured a market stabilizing after the geopolitical shock, including the war in Iran and rising oil and gas prices, that drove the first quarter\u2019s decline.<\/p>\n\n\n\n<p>But CREFC noted that results were mixed and seemed to reflect a cautious mode rather than conviction. Neutral was the most common answer on seven of the nine core questions, which asked about economic outlook, federal policy, interest rate impact, CRE fundamentals, transaction activity, financing demand, market liquidity, <a href=\"https:\/\/www.commercialsearch.com\/news\/can-the-cre-clo-continue-its-run\/\">CMBS\/CRE CLO outlook<\/a> and overall industry sentiment.<\/p>\n\n\n\n<p>Pendergast said the results show members have moved to the middle after the first quarter\u2019s shock, reflecting a market that is disciplined.<\/p>\n\n\n\n<p>\u201cDemand for financing remains net positive, liquidity is steady, and the questions our members are focused on\u2014capital rules, underwriting standards and how bank capital reaches the market\u2014are the right ones for this stage of the cycle,\u201d she said.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-closer-look-at-core-questions\">Closer look at core questions<\/h2>\n\n\n\n<p>A majority of the respondents (58 percent), said they expect the U.S. economy to perform the same over the next 12 months, while 24 percent expect worse and 18 percent expect improvement.<\/p>\n\n\n\n<p>Thirty-seven percent of respondents expect improving fundamentals such as NOI, occupancy and rents, while 53 percent expect no change. Eleven percent expect deterioration, compared to 22 percent in the first quarter.<\/p>\n\n\n\n<p>Borrower demand cooled the most out of the nine core questions, with 45 percent expecting more demand, down from 71 percent in the first-quarter survey. Forty-two percent expect no change and 13 percent less demand.<\/p>\n\n\n\n<p>Asked if investor demand for CRE and multifamily assets would change in the next 12 months compared to last year, 42 percent responded they expect more demand, down from 61 percent the previous quarter. Forty-seven percent said they expect no change and 11 percent responded they expect less demand.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p><strong>READ ALSO: <\/strong><a href=\"https:\/\/www.commercialsearch.com\/news\/the-net-lease-alternative-in-a-stalled-market\/\">Finding the Exit Ramp in a Stalled Market<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity has-very-light-gray-to-cyan-bluish-gray-gradient-background has-background is-style-wide\"\/>\n\n\n\n<p>Market liquidity expectations stabilized after the first quarter\u2019s caution. The survey showed a large majority of 71 percent expect no change, while 24 percent expect improved liquidity, up from 20 percent in the previous quarter. Just 5 percent expect worse conditions, down from 23 percent in the first-quarter index.<\/p>\n\n\n\n<p>When asked about CMBS and CRE CLO demand and spreads and their impact on CRE finance-related businesses over the next 12 months, responses firmed, with 37 percent expecting a positive impact. That\u2019s up from 33 percent in the first quarter. Half are neutral and 13 percent expect a negative impact, down from 18 percent in the first quarter survey.<\/p>\n\n\n\n<p>Sixty-eight percent of respondents have a neutral outlook for the overall CRE finance industry for the next 12 months, with 24 percent taking a positive outlook and just 8 percent registering a negative outlook, down from 22 percent in the first quarter.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-following-federal-actions-and-impacts\">Following federal actions and impacts\u00a0<\/h2>\n\n\n\n<p>The ninth core question asked how federal legislative and regulatory actions will impact the industry over the next 12 months. Nearly half expect a neutral impact, while the remainder are split equally between positive and negative at 26 percent each.<\/p>\n\n\n\n<p>Pendergast told CPE that CREFC and its government relations team \u201care very much focused on more blocking and tackling issues as they relate to both housing and more general CRE issues, such as the continued conversions of office to multifamily.\u201d<\/p>\n\n\n\n<p>She called the bipartisan <a href=\"https:\/\/www.multihousingnews.com\/21st-century-road-to-housing-act-crosses-the-finish-line\/\" target=\"_blank\" rel=\"noreferrer noopener\">21<sup>st<\/sup> Century ROAD to Housing Act<\/a>, which officially became law on July 11, \u201ca solid step in the right direction\u201d to increase housing supply, assist with financing and reduce barriers to development.<\/p>\n\n\n\n<p>Asked whether the upcoming midterm elections in November might impact legislative issues impacting the industry, Pendergast conceded there may be a slowdown in progress on still open issues on the legislative front.<\/p>\n\n\n\n<p>\u201cRegulators will continue to be busy with regulatory implementation,\u201d she said. \u201cThink Basel III Endgame, heightened regulatory oversight of bank CRE exposures, the implementation of the Current Expected Credit Loss accounting with banks focusing on reserves, loss estimates, certain assets and watch-listed loans.\u201d<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The group&#8217;s latest survey shows finance leaders settling into a more cautious outlook, even as borrowing costs continue to weigh on activity.<\/p>\n","protected":false},"author":1068,"featured_media":1004575204,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21825,21783,23891,21742],"tags":[49138,51896,52599],"class_list":["post-1004805597","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-finance","category-investment","category-national","category-latest","tag-cre-finance-council","tag-crefc","tag-lisa-pendergast"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.0 (Yoast SEO v28.0) - 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