Commercial mortgage-backed securities loan origination volume was challenging banks and life insurers for the top spot among lender types.
The June increase in interest rates impacted volumes, with spreads on CMBS, life company loans and government-sponsored enterprise loans all widening.
“While the market stabilized in July, concerns remained about pricing and debt availability would be negatively affected in certain segments of the commercial market,” said an article in the CBRE Lender Forum.
There might be more rate increases coming in the future, but CBRE said there are “reasons to remain cautiously optimistic,” such as the U.S. economy continues to expand and commercial property fundaments continue to improve.
The Mortgage Bankers Association previously reported life companies set a record in 2Q13 for lending, while the CMBS sector was down 14%,
Liquidity remains for commercial properties, as life companies have “ample investment allowances” for the rest of the year, the report said. Banks are increasingly active in the sector as well.
However CMBS spreads were affected by the rate increase in the late second quarter, as by the end of June spreads jumped more than 40 basis points from their May lows.
But by the second half of July, CMBS spreads tightened. CBRE cited statements by Fed officials which calmed the markets and slowing economic growth and disappointing retail sales were the factor.
The market upheaval affected conduit lenders the most, while life companies took a pause in June but are now actively quoting deals.