The report reveals that commercial loan closings increased by 13.6 per cent year-over-year in Q4 2018.
“Despite recent equity market volatility, commercial real estate has weathered the storm well. Many banks and life companies have ample capital to allocate toward commercial mortgages. Alternative lenders have raised record amounts of capital for secondary finance and transitional property lending. The agencies have maintained their loan purchase goals for 2019, which will continue to support liquidity in the apartment sector,” said Brian Stoffers, Global President, Debt & Structured Finance, Capital Markets, CBRE.
Banks accounted for more than 38% of non-agency lending volume in Q4 2018, up almost 10 percentage points year-over-year.
Alternative lenders, including REITS, finance companies and debt funds, accounted for 25.3% of loan closings in Q4 2018—up from 20% a year ago. Large amounts of private equity capital have been raised to deploy in secondary finance, construction and bridge loans. As a result, origination activity has picked up in recent months.
CMBS conduit originators accounted for 13.4% of non-agency loan production in Q4 2018, down slightly from Q3 2018 and down from more than 20% of the market a year ago. CMBS issuance totaled $77 billion for the year, down from $87.8 billion in 2017, with lower refinance activity one factor that accounted for the reduced issuance.