CBRE notes that many key bank interest rates and spreads have not been materially impacted by the recent increases in 10-year Treasury rates. However, bank construction lending remains limited and banks are still hemmed in by stiff regulatory oversight, at least until the new administration's push for deregulation takes full effect.

And although CMBS conduit lenders increased their closings in Q4, the sluggish momentum established by this lending class earlier in the year was overcome only to a limited extent during the year's final quarter. CMBS lenders accounted for 13.5% of non-agency lending volume during the quarter, up slightly from their 11.5% share recorded a year earlier.

Overall, CBRE says, CMBS production was down last year as issuers grappled with a poor spread environment early in the year and with ongoing regulatory issues, including the risk retention requirement that took effect this past December. Earlier this month, USAA Real Estate reported the final tally at $76 billion, down considerably from industry estimates at the beginning of the year that ranged as high as $125 billion. “After six consecutive years of growth, many market participants are wondering

if last year's performance was an anomaly or if it represents a secular shift in CMBS expectations,” according to a USAA Real Estate report.

Helping to fill the gap left by banks in Q4 was the “other” lender category. This miscellaneous class of lenders—including REITS, private lenders, pension funds and finance companies—continues to provide a significant amount of bridge, permanent loan and construction financing, says CBRE. They accounted for 24% of non-agency lending volume in Q4 '16, up from 14.5% in the previous quarter.

LOS ANGELES—In contrast to perceptions that commercial real estate debt has been harder to come by lately, the fourth quarter of 2016 actually represented a new high water mark even amid uncertainty about the global economy. So says CBRE Group, which reports a surge of loan closings in November and December of last year, driving the CBRE Lending Momentum Index to 266, the highest level on record and a 37% increase year over year and quarter over quarter.

“The commercial real estate lending market has shown its resilience throughout the course of the year which made for a stellar end of '16,” says Brian Stoffers, global president, debt & structured finance, CBRE Capital Markets. “Life companies and several other capital sources have stepped in as attractive options for borrowers as banks continue to tighten their underwriting standards. We expect this momentum to carry into the early part of 2017 as we wait to learn more about the policies put in place by the new administration.”

Leading the way in Q4 were life insurance companies, which also increased their share of loans closed by CBRE Capital Markets, accounting for more than 34% of non-agency commercial loan closings. This is up from 25% in Q3 and above the 23% share recorded in Q4 2015.

Conversely, bank lending began to slacken after a brisk pace during the first half of the year. Banks accounted for 27.7% of loan volume in Q4, compared with a 42.7% share a year earlier.

CBRE notes that many key bank interest rates and spreads have not been materially impacted by the recent increases in 10-year Treasury rates. However, bank construction lending remains limited and banks are still hemmed in by stiff regulatory oversight, at least until the new administration's push for deregulation takes full effect.

And although CMBS conduit lenders increased their closings in Q4, the sluggish momentum established by this lending class earlier in the year was overcome only to a limited extent during the year's final quarter. CMBS lenders accounted for 13.5% of non-agency lending volume during the quarter, up slightly from their 11.5% share recorded a year earlier.

Overall, CBRE says, CMBS production was down last year as issuers grappled with a poor spread environment early in the year and with ongoing regulatory issues, including the risk retention requirement that took effect this past December. Earlier this month, USAA Real Estate reported the final tally at $76 billion, down considerably from industry estimates at the beginning of the year that ranged as high as $125 billion. “After six consecutive years of growth, many market participants are wondering

if last year's performance was an anomaly or if it represents a secular shift in CMBS expectations,” according to a USAA Real Estate report.

Helping to fill the gap left by banks in Q4 was the “other” lender category. This miscellaneous class of lenders—including REITS, private lenders, pension funds and finance companies—continues to provide a significant amount of bridge, permanent loan and construction financing, says CBRE. They accounted for 24% of non-agency lending volume in Q4 '16, up from 14.5% in the previous quarter.