U.S. Capital Markets Glide Path to Clearer Skies

Debt markets down but still functioning Lending volumes by lender type (billions)

$300

• CRE can operate in a high interest rate environment, but it is much more difficult for CRE to operate in a highly-uncertain and volatile base-rate environment. • Uncertainty surrounding the economic outlook, property values and future cash flows have curtailed lending flows. • YTD 2023* lending volume is registering 39.3% below the 2017-19 average. • YTD 2023 figures still register at $97 billion, and are revised up as lending data flows in. • Downshift in bank lending will shift composition across lender type.

$250

2017 – 2019 Average

$200

$150

$100

$50

$0

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

Bank CMBS Financial

Government Agency Insurance Pension Fund Private

31

Source: MSCI Real Capital Analytics. Note: *Data extend YTD through June 2023, but recent data are often revised upward.