Compared with third quarter, fourth quarter was characterized by higher levels of liquidity and lending momentum, increased participation by alternative lenders and life companies, tighter credit spreads, and a modest loosening of underwriting measures. Nonetheless, certain deals remained challenging to underwrite, especially for retail, hotel and transitional assets.
The CBRE Lending Momentum Index increased by 38.2 percent in fourth quarter but was down by almost 24 percent from its pre-pandemic level in February 2020.
Fourth quarter origination activity was more balanced, with strong participation from alternative lenders for bridge loans and life companies for stabilized low-leverage loans. The agencies also had stellar fourth quarter production, which provided high levels of liquidity to the multifamily market.
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