The latest quarterly sentiment index from industry association CRE Finance Council reveals reveals concerns across various fronts of the overall economy and commercial real estate markets.

The Index is derived from the CREFC Board's responses to nine core questions on the state of the CRE finance market and the latest data shows that in Q3 overall sentiment continued to slump, dropping 13% quarter-over-quarter to hit 61.4. That marks the fifth consecutive decline following 12% drop in overall sentiment in Q2. Sentiment for CRE fundamentals also moved significantly, with 83% of the Board expecting fundamentals to worsen, a 49 point jump from Q2.

Trends in CMBS and CRE CLO demand/spreads and their impact on CRE finance-related businesses also shifted negatively. In 2Q 2022, 49% believed there would be a negative impact, with 40% remaining neutral. In the current survey, 75% held a negative outlook, with only 21% remaining neutral. And 89% of Board members held an unfavorable outlook for CRE finance businesses, up from 59% in Q2.