CRE Daily
Posts
CBRE: CRE Loan Volume Climbs 11% as Lenders Compete on Pricing

CBRE: CRE Loan Volume Climbs 11% as Lenders Compete on Pricing

Borrowers are increasingly opting for floating-rate loans as lower borrowing costs reshape financing strategies.

Nina Dale
August 05, 2026

In partnership with

Good morning. Lending fundamentals continue to support CRE transactions, even as the market adjusts to changing interest rate dynamics. The biggest shift? Borrowers are increasingly favoring floating-rate debt as lenders sharpen pricing.

CRE Trivia 🧠

Which 1944 New Hampshire conference established the US dollar as the world's reserve currency and created the IMF and World Bank?

IN PARTNERSHIP WITH PACE LOAN GROUP

Do you need institutional capital without the red tape?

PLG, backed by over $20 billion in institutional capital, has funded 200+ C-PACE loans – all without the institutional red tape that slows down lenders. Why? We originate, close, and fund. No smoke, no mirrors.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

Market Snapshot

S&P 500

GSPC

7,736.52

Pct Chg:
+1.79%

FTSE NAREIT

FNER

865.94

Pct Chg:
-0.30%

10Y Treasury

TNX

4.621%

Pct Chg:
-0.063%

CME Term SOFR

1-Month

3.65%

Pct Chg:
-0.00

*Data as of 08/04/2026 market close.

Debt Dynamics

CBRE: CRE Loan Volume Climbs 11% as Lenders Compete on Pricing

CBRE says lending fundamentals remained healthy in Q2 2026, with more loans closing, larger deal sizes, and lenders competing aggressively on pricing rather than leverage.

By the numbers: The CBRE Lending Momentum Index eased to 1.0 in Q2 2026 from a five-year high of 1.5 in Q1, but remained well above the 1.3 reading from a year ago. Loan activity continued to climb, with the number of commercial loans increasing 11% YoY and the average loan size rising 5%.

Pricing gets more competitive: Lenders tightened spreads as competition intensified. Commercial mortgage loan spreads narrowed 21 bps YoY to 204 bps, while multifamily spreads tightened 15 bps to 162 bps. At the same time, loan-to-value ratios declined, signaling lenders are competing on price instead of offering higher leverage.

Borrowers shift to floating rates: CBRE says the steep yield curve is encouraging borrowers to favor floating-rate loans over fixed-rate financing. A roughly 70 bps gap between SOFR and five-year fixed rates, combined with greater prepayment flexibility, is driving the trend despite higher interest-rate cap costs.

Alternative lenders gain ground: Debt funds continued to expand their market share, with alternative lenders accounting for 38% of CBRE's non-agency loan closings, up from 34% a year ago. Banks increased their share to 30% from 24%, while life companies represented 21%. CMBS lenders lost ground, falling to 11% of non-agency volume from 19% a year earlier.

Healthy underwriting persists: Credit quality metrics remained solid. Debt service coverage ratios improved to 1.43 from 1.34, while debt yields increased to 10.2% from 9.7%. Average mortgage rates edged down to 5.7%, and leverage became more conservative, with commercial LTVs declining to 59.6% and multifamily LTVs falling to 63.3%.

➥ THE TAKEAWAY

Pricing takes priority: Capital remains widely available, but lenders are becoming increasingly aggressive on pricing instead of leverage. With floating-rate loans gaining favor and alternative lenders continuing to capture market share, competition for high-quality CRE loans is likely to remain strong through the second half of 2026.

A MESSAGE FROM CREXI

Your Next Retail Investment: Live on Crexi Auction

Retail momentum is real, and Crexi Auction buyers are capitalizing. $3.3B in total bids have been placed on retail listings, with more than $367M in retail property value brought to auction.

These aren't distressed leftovers. They're competitively priced, thoroughly vetted retail assets that draw demand from serious investors.

New inventory hits the auction block every week. Bid on your terms, and close with the speed and certainty Crexi Auction is known for.

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

✍️ Editor’s Picks

For the next eight weeks, Cost Segregation Guys is offering 25% off cost segregation studies. Work with the Nation's top firm that has generated over $1B in depreciation and 10,000+ studies. Get a free analysis today! (sponsored)
CRE comeback: Banks are growing CRE lending again through disciplined multifamily and industrial deals while managing legacy risks from aggressive 2021–2022 loans.
Student investors: Indiana University undergraduates are managing a $12M real estate fund, with their first warehouse investment delivering a 65% gross profit.
Mainstream momentum: With broader eligibility, larger loans, and institutional adoption, C-PACE has emerged as a widely accepted financing solution for CRE. (sponsored)
Pricing pause: CRE values barely moved in Q2 as investors balanced interest rate uncertainty, uneven property performance, and shifting demand across major markets.
Government ready: KODE Labs secured clearance for the U.S. government's most sensitive environments, expanding its secure, vendor-neutral building intelligence platform to federal agencies and other high-compliance organizations.

🏘️ MULTIFAMILY

Renter squeeze: Affordability pressures remain elevated across U.S. metros, with severe cost burdens revealing deeper rental stress beyond headline trends.
Multifamily reset: Banks are cautiously easing multifamily lending standards as pricing competition intensifies, with large lenders leading a gradual return to market activity.
Supply relief: Inland Empire multifamily demand surged ahead of new deliveries in Q2, boosting occupancy as construction slows and market conditions improve.
Urban renters: Gen Z is extending its rental years by prioritizing walkable, amenity-rich locations over suburban homeownership, supporting long-term multifamily demand.

🏭 Industrial

AI infrastructure: Data center construction spending hit record levels in 2026 as AI demand drives larger projects across power-rich U.S. markets, reshaping commercial real estate investment trends.
Industrial rebound: Warehouse demand is expanding beyond newer mega-distribution centers as tighter availability boosts leasing activity across older and smaller industrial properties.
AI demand: Caterpillar raised its outlook as record demand for data center power equipment fuels growth, highlighting the physical infrastructure behind the AI boom.

🏬 RETAIL

Retail revival: Onyx Partners is pursuing a $934M acquisition of 117 J.C. Penney stores, betting on long-term value in a national retail portfolio with stable leases and redevelopment potential.
Drive-thru risk: Investors are reassessing net-lease retail assets as growing city opposition to drive-thrus threatens a once-reliable feature of fast-food properties.
Retail comeback: L3 Capital acquired Palmolive Building retail space at a 28% discount, betting on renewed potential for Chicago’s Magnificent Mile corridor as luxury retail demand gradually recovers.

🏢 OFFICE

Austin ascends: Apollo Global Management is opening its second headquarters in Austin, leveraging the city’s talent, technology, and growth potential to expand its future business operations.
AI shift: AI is reducing routine office roles while increasing demand for higher-value talent, accelerating the shift toward premium buildings and quality workspace.
QTS expands: QTS is leasing 77K SF at Reston Station for its new headquarters, highlighting strong demand for premium office space in the D.C. market.
Midtown upgrade: JAMS is relocating its New York headquarters to 3 Times Square, taking 55K SF as companies continue prioritizing high-quality office spaces with strong amenities and locations.

🏨 HOSPITALITY

Hotel bidding: Hotel acquisitions are becoming more competitive as private equity and wealthy investors pursue deals, pushing DiamondRock to stay selective in 2026.
Growth outlook: Marriott beat quarterly earnings expectations, but lowered its 2026 room growth forecast as Middle East construction delays and regional conflict weighed on expansion plans.
Hotel resilience: Driftwood Capital argues hotel real estate credit remains fundamentally stronger than corporate private credit, citing resilient loan performance, limited new supply, and asset-backed protections.

📈 CHART OF THE DAY

Gen Alpha is roughly 2 million smaller than Gen Z at the same age, signaling slower future household formation as lower immigration and affordability pressures shrink the pipeline of new renters and homebuyers.

The Bretton Woods Conference. Representatives of 44 nations gathered in July 1944 to design the postwar financial order; the dollar's convertibility to gold anchored the system until Nixon suspended it in 1971.

CBRE: CRE Loan Volume Climbs 11% as Lenders Compete on Pricing

Borrowers are increasingly opting for floating-rate loans as lower borrowing costs reshape financing strategies.

CRE Trivia 🧠