Economy Watch: CRE Lending up in 2Q, CMBS Gains Traction

Volume increased across all lending groups, with CMBS leading all other lenders in terms of market share, according to CBRE's recent Lending Momentum Index.

Source: CBRE Lending Momentum Index
Source: CBRE Lending Momentum Index

CRE lending edged higher between the first quarter of 2017 and the second, and is up 27 percent year-over-year, according to the most recent CBRE Lending Momentum Index, which tracks the velocity of commercial loan closings nationwide. Volume increased in all major lending groups, with capital readily available for real estate deals. CMBS led all other lenders in terms of market share.

In the second quarter, CMBS issuance spiked, putting year-to-date issuance at $38.8 billion, which is ahead of 2016’s pace of $30.7 billion. CMBS conduits totaled 36 percent of non-agency origination activity in second-quarter 2017, ahead of their 16 percent market share during the first quarter, and 10 percent market share a year earlier, CBRE reported.

Also, life companies continued to lend with considerable gusto, accounting for more than 24 percent of non-agency commercial deals in the second quarter. That level is down from their 38 percent market share during the first quarter, but an improvement on their 20 percent share a year ago.

For their part, banks accounted for 18 percent of loan volume in the second quarter, compared with 26 percent in the previous quarter. A year ago, banks did almost half of CRE lending.