LOS ANGELES—December's enactment of the tax reform package buoyed investor sentiment toward commercial real estate and contributed to a favorable lending environment, CBRE said Tuesday. The latest CBRE Lending Momentum Index, which showed a slight quarterly decline for the last three months of 2017, nonetheless also reflected more balanced participation among lender classes as well as slightly more aggressive underwriting.

“With the recent enactment of comprehensive tax reform and relatively favorable treatment of commercial real estate as an asset class, we expect continued strong investor interest in the sector,” says Brian Stoffers, global president, debt & structured finance, capital markets at CBRE. “Significantly lower maturing loan volumes in 2018 and good supply/demand equilibrium should continue to result in favorable loan spreads for borrowers.”

The index slipped by 1.2% in Q4, and December lending volume was down 15.9% on a year-over-year basis. However, loan production in December 2016 was exceptionally high, and the index for full-year '17 was up 14.5% over '16 levels.