Who Lends to Commercial Real Estate Now
Debt funds and other alternative lenders closed 38% of non-agency commercial real estate loans in the second quarter, CBRE data show. Banks gained ground; CMBS lost it.
Why it matters
- Alternative lenders were the largest non-agency lender group in Q2, with 38% of closings, up from 34% a year earlier.
- Underwriting stayed conservative, with lower loan-to-value ratios and higher coverage ratios than a year earlier.
- The data cover a quarter that ended before the Fed's Sept. 16 rate increase.
Data Brief: a summary of published data, with our notes on what it shows.
CBRE's quarterly lending report, released Aug. 3, gives one of the clearest public views of who is financing U.S. commercial real estate outside the government-sponsored agencies. This brief summarizes the second-quarter figures.
Lender share of non-agency closings
| Lender group | Q2 2025 | Q2 2026 |
|---|---|---|
| Alternative lenders (debt funds, mortgage REITs) | 34% | 38% |
| Banks | 24% | 30% |
| Life insurance companies | n/a | 21% |
| CMBS lenders | 19% | 11% |
CBRE did not report a year-earlier share for life insurance companies in its release.
What it shows: alternative lenders remained the largest single group. Banks also gained share, rising six percentage points. The loss came from CMBS conduit lending, whose share fell from 19% to 11%.
Activity and underwriting
| Measure | Q2 2025 | Q2 2026 |
|---|---|---|
| CBRE Lending Momentum Index | 1.3 | 1.0 |
| Commercial loan-to-value ratio | 60.8% | 59.6% |
| Multifamily loan-to-value ratio | 65.8% | 63.3% |
| Debt service coverage ratio | 1.34 | 1.43 |
| Debt yield | 9.7% | 10.2% |
| Average mortgage interest rate | 5.9% | 5.7% |
The Lending Momentum Index, which tracks the pace of CBRE-originated commercial loan closings, fell from a five-year high of 1.5 in the first quarter. Even so, CBRE reported that commercial loan volume was up 11% from a year earlier and the average loan size rose 5%.
What it shows: lenders were closing loans at lower leverage and higher coverage than a year earlier. Those are signs of conservative underwriting, not of lenders reaching for volume.
Pricing
Spreads on five- to 10-year fixed-rate commercial mortgages averaged 204 basis points, 21 basis points narrower than a year earlier. Multifamily spreads averaged 162 basis points, 15 narrower. "Fixed-rate lenders are making concessions on credit spreads to compete for product," said James Millon, president and co-head of capital markets at CBRE.
Our notes
- Timing matters. These figures cover April through June. Since then, the Federal Reserve has raised its policy rate and the 10-year Treasury yield, which anchors fixed-rate commercial loan pricing, ended September at 5.29%. Narrower spreads in Q2 were measured against a lower base rate.
- Competition and conservatism at once. Lenders competed on spreads while lending at lower leverage. That combination suggests competition for the safest loans rather than looser credit overall.
- Watch the next release. The third-quarter report will be the first to include closings after the September rate increase.
Sources
- CBRE, Commercial real estate lending fundamentals remain strong in Q2 2026 (Aug. 3, 2026)
- U.S. Department of the Treasury, Daily Treasury par yield curve rates, September 2026
