Banks Most Active Lenders in U.S. Commercial Markets in Q1

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According to CBRE's June 2014 edition of the U.S. Lender Forum, banks were the most active commercial lenders during Q1 2014, accounting for approximately 42% of originations during the quarter. Commercial mortgage-backed securities accounted for 11% of originations during the quarter.

The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, eased in March after reaching its highest point since 2007 in January. While the Index ended March 12% off of December's level, it remained up 16% year-over-year.

"With debt readily available from a variety of sources, the commercial real estate finance market is experiencing high levels of liquidity and stronger transaction volumes," said Brian Stoffers, Chief Operating Officer, CBRE Capital Markets and President, Debt & Structured Finance, CBRE. "Acquisitions accounted for more than half the volume of permanent financing loans during Q1 2014, up substantially from Q4 2013. We strongly believe this moment in time offers a compelling window of opportunity for borrowers to lock in favorable financing terms."

Average loan-to-value (LTV) ratios on permanent, fixed-rate commercial loans experienced a slight decrease to 62.8% during Q1 2014, while the average multifamily LTV increased to 68.8%. Average debt service coverage ratios settled down to 1.45x during Q1 2014, after reaching 1.53x in Q2 2013.

Notably, 57% of permanent loans completed during the quarter included partial or full interest-only payments over the loan term.