No Bull: Outlook Turns Bullish for Capital Flows

LOS ANGELES-Despite risks that can’t be ignored, experts foresee bright times ahead for the already much-improved debt markets in 2011. Commercial mortgage markets improved dramatically in 2010, observers say, and that improvement is expected to continue throughout this year.

“The risk of changes in the global capital markets creates a degree of uncertainty for lenders and borrowers alike,” Spencer Levy, executive managing director of CBRE Capital Markets, says in a recent report by CBRE Econometric Advisors and CBRE Capital Markets. On the other hand, the group’s latest index, which tracks the momentum of deal activity in the market for commercial mortgage loans, shows that lending activity steadily increased throughout 2010. “The index stood at a value of 24 in September of 2009 versus a high of 170 in February of 2007,” says Levy. “The way to best interpret this change is in absolutes; there was an 86% decline in lending volume over this 31 month period.”