According to the Mortgage Bankers Association’s (MBA) 2024 Commercial Real Estate Finance Outlook Survey, commercial and multifamily mortgage originators are facing an unsettled market for borrowing and lending. However, they anticipate that these conditions will stabilize throughout 2024. The survey highlights several key points:
– Over 90% of respondents consider the current market to be somewhat or very unsettled.
– Among different property types, the office market is seen as having a negative impact on borrowing and lending while industrial properties have a more positive outlook.
– Factors such as cap rates, valuations, base interest rates, and rate volatility are all viewed as negatively affecting financing activity at this time.
– Originators expect the market to become more stable over the course of 2024.
– Lenders are expected to have a slightly stronger appetite for lending compared to borrowers’ willingness to borrow in 2024.
– Borrowing and lending volumes are predicted to increase in 2024.
Despite uncertainty surrounding specific capital sources, overall expectations suggest that commercial real estate markets will see improvement throughout this year. Jamie Woodwell from MBA states that top leaders in commercial real estate finance firms believe various factors may continue hindering progress but overall uncertainty is expected dissipate over time leading up increased borrowing and lending levels compared with those seen in previous years.
