With inflation, rising interest rates, and bad performance in the Treasury market, the CRE Finance Council (CREFC) found that overall sentiment among its board of governors took a nosedive for the first quarter of 2022. 

The organization started the index in 2017. The current level, a score of 80.5, down from 105.2 in the last quarter of 2021, is the second lowest on record, with only the first quarter of 2020 registering worse. The change was "decidedly negative."

Although in the previous quarter 65% of the board expected the economy to improve or stay the course, now only 25% hold that view. Three-quarters expect the economy to worsen. Expectations of borrower demand are also lower: "In 4Q 2021, 59% believed there would be more borrower demand for CRE and multifamily debt, with the remainder feeling it would stay the same. In the current survey, only 13% believed there would be greater demand, with 35% believing there would be less demand."