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CRE Poised for Continued Lending Growth in 2022

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According to industry experts, the number of commercial real estate lending deals is poised to outperform last year’s volume, even in a higher interest-rate climate. Unsurprisingly, industrial and multifamily are anticipated to lead, while some say office deals could take an even bigger hit in 2022. Total CRE debt from commercial banks rose by $116B as of Dec. 1, 2021, compared with 2020, when the market was halted during the peak of the COVID-19 pandemic, according to data analytics firm Cred iQ. Private-label securitization also jumped in 2021 to $159B, from $63B in 2020, with Cred iQ forecasting a slight increase to $161B for 2022. Another factor driving elevated loan-origination volume through 2022 is borrowers’ desire to lock in lower rates ahead of the Fed’s expected monetary tightening.

ACORE Capital co-Founder Warren de Haan predicts plenty of tailwinds behind CRE lending in 2022. “I expect 2022 to be a banner year on the investment sales side, and for us on the lending side I think it’s also going to be a banner year,” de Haan said. “The banks continue to deal with regulatory pressures, and the debt funds — like ourselves — I think will enjoy a bigger share of the market.” With a record amount of capital raised dedicated to CRE from private equity, pension funds, and foreign investments, experts say there is more money than ever sitting on the sidelines waiting to be invested. This year could also see an uptick in refinancing deals, especially in the CMBS space, as several deals will be up for redemption previously issued at a far higher fixed interest rate.