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While commercial and multifamily mortgage originators continue to experience an unsettled borrowing and lending market, conditions are anticipated to stabilize over the course of 2024, according to the Mortgage Bankers Association (MBA).

“Commercial real estate markets are entering 2024 amid a great deal of uncertainty and, as a result, a significant slowdown in activity,” said Jamie Woodwell, head of commercial real estate research at the MBA. “Leaders of top commercial real estate finance firms believe that a host of factors may continue to act as a drag—rather than a boost—to the markets. However, they do believe the overall uncertainty will dissipate over the year, helping to boost borrowing and lending above 2023 levels.”

The MBA’s 2024 Commercial Real Estate Finance (CREF) Outlook Survey polled leaders of the top commercial and multifamily mortgage origination firms between Nov. 30 and Dec. 15 to gauge their outlook for the year ahead.

Over 90% of respondents consider today’s borrowing and lending market either somewhat or very unsettled.

According to the survey, cap rates and valuations; base interest rates; and rate volatility are viewed as having negative impacts on today’s financing activity. When it comes to property types, office is viewed as most negatively affecting borrowing and lending, while half of the respondents view industrial as having positive impacts.