CBRE: U.S. Commercial Real Estate Lending Market Remains Strong

The world has been watching as global trade tensions develop. But commercial real estate is a different story. Professionals here remain optimistic, reporting they haven’t yet felt the effects of the trade battle.

Case in point: Heavyweight real estate services firm CBRE Group has concluded, based on new research, that “the commercial real estate lending market remains robust” and has “kept pace with the previous quarter.” This is notable, the company said, in light of current “financial market volatility and heightened trade tensions.”

Specifically, the CBRE lending momentum index, which “tracks the pace of U.S. commercial loan closings,” found that “lending volume closed in Q2 2018 at a value of 202, relatively unchanged from 203 in Q1 2018.”

Brian Stoffers, global president of debt and structured finance within the capital markets division at CBRE, said he believes “the commercial mortgage lending market should remain favorable to borrowers for the balance of the year. Loan credit spreads remain tight and underwriting standards are stable,” Stoffers said. “While there is some risk to an escalation of trade disputes, this has not yet influenced credit availability or pricing.”

Also key to CBRE’s findings was the growing role of banks in the commercial real estate lending market.

“Banks were very active in Q2 2018, accounting for almost half of the non-agency lending volume closed during the quarter,” according to CBRE. “The shift toward banks was a departure from most of 2017 and early 2018, when a variety of traditional and alternative lenders issued quotes.”

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