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CRE finance sentiment drops to lowest level since 2023

The CRE Finance Council index fell 17.5% to 83.3 in the third quarter, with more than 90% of respondents citing pressure from mortgage and cap rates.

Reported · Written up by our desk · Commercial

Bisnow reports that commercial real estate finance companies are more concerned about the year ahead, according to the CRE Finance Council’s third-quarter survey.

The group’s industry sentiment index dropped 17.5% from the prior quarter to a reading of 83.3, the lowest level since the third quarter of 2023, and 34% below the record high of 126.6 set in the final quarter of 2024.

More than 90% of respondents said mortgage and cap rates are likely to weigh on CRE finance businesses over the next year, and many worries go beyond the next Fed decision to inflation, fiscal deficits, and long-term borrowing costs, CREFC Managing Director Raj Aidasani said in a statement.

The survey also found that nearly two-thirds of respondents expect the economy to weaken over the next year, which could compound stress for borrowers through weaker rents and cash flow as higher rates and maturing loans remain in the mix.

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