United States of America Lending MarketView Snapshot Figures Q4 2016
According to the CBRE Lending Momentum Index, 2016 lending volume finished on a strong note as commercial loan closings surged in November and December. The index reached a value of 266 in Q4 2016, the highest level on record. This represented a 37% increase from the Q3 level, as well as from the prior year.
Life companies led all other major lenders in Q4 and increased their share of loans closed by CBRE Capital Markets.
As widely anticipated, the Federal Reserve raised its target Federal Funds Rate by 0.25% in December. Most market participants believe that the Fed will raise short-term rates three to four times in 2017 (75 to 100 bps total). CBRE Econometric Advisors anticipates that the 10-year U.S. Treasury could rise to approximately 3% by year-end 2017.
Despite the increase in benchmark U.S. Treasury rates late in Q4, average spreads on senior commercial and multifamily loans that closed during the quarter remained generally comparable with the prior quarter.