In this episode of ‘The Inside Look,’ Senior Commercial Real Estate Economist Xander Snyder explains how lenders are beginning to re-enter the market and why that might be the case. Watch below and subscribe to the CRE Insider blog for additional insights from First American Title NCS. Transcript: CRE Loan Origination up Modestly in the Second Quarter It’s been a challenging few years for the Commercial Real Estate market, but lending data from the second quarter shows that loan origination activity is picking back up. Does this mean we’re near or at a turning point in terms of credit availability? It certainly does warrant some cautious optimism, but let’s take a look at the data in greater detail. Cautious Optimism While 3 percent isn’t a jaw-dropping increase, it is the first increase in lending activity of over a percentage point since credit markets froze in 2022. Additionally, origination activity did not increase equally across lender types. Banks and agencies originated fewer loans in the second quarter of 2024 as compared to the second quarter of last year. Meanwhile, life insurance companies and investor lenders increased their origination activity The most obvious increase here, though, is originations of Commercial Mortgage Backed Securities, or CMBS. The meaningful rise in CMBS loans is encouraging, as it indicates that credit availability for very large transactions has increased compared to a year ago. That said, compared to pre-pandemic, CMBS origination activity is down still down, by about 20 percent. So, while the headline story is that CRE lending increased in the second quarter as compared to a year ago, it did not occur evenly or in the same proportion by lender type as compared to pre-pandemic. Events I’ll be giving a talk in late November in Birmingham Alabama on the state of the CRE reset and when we should expect more of a turnaround to occur. If you’re interested in attending, please reach out to your local First American representative.