Investment Volume Rises; Debt Fundamentals Improve

Executive Summary

• Commercial real estate investment volume increased by 31% year-over-year in Q4 to $121 billion. For the year, volume was up by 8% to $392 billion. 
• The CBRE Lending Momentum Index increased by 21% quarter-over-quarter and 37% year-over-year in Q4.
• Private investors were the biggest buyers, accounting for $70 billion of Q4 investment volume, followed by institutional investors with $24 billion. 
• Inbound cross-border investment increased by 15% year-over-year in Q4 to $8.8 billion, led by the industrial and office sectors. 
• Banks were the biggest non-agency lenders, accounting for 43% of Q4 loan closings, followed by life companies (33%) and alternative lenders (23%).
• Commercial and multifamily spreads tightened by 49 and 36 basis points (bps), respectively, in Q4 compared with a year ago. This is based on loans with a permanent, fixed-rate, seven-to-10-year term and a 55-to-65% loan-to-value (LTV) ratio.