Commercial real estate lending markets mirror economic recovery

Commercial lending markets strengthened in second quarter 2021, mirroring the wider economic recovery, with borrowers’ growing risk appetite fueling increased demand for transitional financing, such as bridge loans, according to CBRE.

The CBRE Lending Momentum Index, which tracks the pace of CBRE-originated commercial loan closings in the United States, remained strong at the mid-year point, reaching a value of 256 — up 10.8 percent from the March 2021 reading and now only 1.8 percent below its February 2020 pre-pandemic close. Compared with a year ago, when lending activity fell sharply due to the COVID-19 pandemic, the index is up by 47.3 percent. Lending activity hit its most recent low in September 2020, when the index value was 160.

“Borrower’s growing risk appetite has fueled demand for transitional financing, such as bridge loans. As a result, alternative lenders led second quarter non-agency commercial mortgage origination activity. Regional banks and