Commercial real estate debt market remains subdued, says Aegon

Although the Federal Reserve remains cautious on interest rate decisions, the sharp rise in interest rates over the past year, tighter lending conditions and economic uncertainty continue to take their toll on transaction volume. The commercial real estate debt market remains relatively subdued, says Aegon Asset Management in the firm’s CRE Fall Insights.

Life insurance companies and other non-bank lenders remain interested in commercial mortgage loans but remain cautious with their allocations. Borrowers continue to favor shorter-term loans with interest-only options and flexible prepayment terms. Life insurance companies and other non-bank lenders looking to deploy capital should be well positioned as borrowers seek alternative sources resulting from any pullback in bank lending activities.

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