U.S. Commercial Debt Closings Up Sharply in 2014

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Based on the latest research from CBRE, office and industrial loan closings in the U.S. were up sharply during the first half of 2014 as the lending recovery broadened beyond the multifamily sector.
 
Office and industrial lending volume were both up by more than 50% year-to-date over the same period a year ago, while retail volume was up by more than 20%. After an extended period of growth, multifamily lending leveled off compared to last year as the sector enters a more mature phase of its investment cycle.
 
Banks were again the most active commercial lenders during Q2 2014, accounting for close to one-third of commercial originations, ahead of life companies and CMBS insurers by a significant margin. The re-emergence of banks as primary lenders has been supported by several factors, including lower commercial loan delinquency rates, higher levels of liquidity and a gradual loosening of credit standards.
 
The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, increased 11.3% quarter-over-quarter and ended the first half of 2014 10.1% above its year-earlier level. The strong uptick in lending activity largely stemmed from an increase in commercial property investment sales activity.
 
CBRE's President of Debt & Structured Finance, Brian Stoffers, said, "The commercial lending markets are firing on all cylinders. Lending volumes for office and industrial properties are both up significantly; a sign that the lending recovery has materially broadened beyond the multifamily sector, as improving leasing fundamentals are boosting confidence. Value-added funds and opportunistic investors are also looking for value in secondary markets where capital is much more readily available than just a year ago. We believe that lending markets will remain tilted in the borrower's favor, at least over the near term."