The Federal Reserve Bank of St. Louis has released a new analysis indicating that commercial real estate lending by U.S. banks has been slowing and reached an 11-year low in the fourth quarter of 2024.
That might appear to contradict reports showing an increase in lending. However, activity can rise in some respects while declining in others.
Start with the good news, CRE investment and lending surged in the first quarter of 2025, according to the CBRE Lending Momentum Index, which grew by 13% quarter-over-quarter and 90% year-over-year in the first three months. Banks were 34% of the closings by non-agency lenders. That was up from 22% in the first quarter of 2024.
