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A new report from the Mortgage Bankers Association has put numbers to the huge drop-off in commercial real estate lending in America.

Total CRE mortgage borrowing and lending totaled $429 billion in 2023, a 47 percent decrease from the $816 billion in 2022, and a 52 percent decrease from the record $891 billion in 2021, the trade group said in a new analysis. Dedicated commercial mortgage bankers at larger banks and non-bank lenders originated $306 billion worth of loans last year, the MBA said, 49 percent less than the $595 billion the association tracked in 2022.

Depositories were the leading capital source of CRE mortgage debt, followed by life insurance companies and pension funds, government-sponsored enterprises (Fannie Mae and Freddie Mac), private label commercial mortgage-backed securities and investor-driven lenders.

“Higher interest rates, uncertainty about property values, and questions about some properties’ fundamentals led to a steep fall-off in borrowing and lending backed by commercial real estate last year,” Jamie Woodwell, MBA’s head of commercial real estate research, said in a statement. “The declines were broad-based, covering every major property type and capital source. The sustained growth in the amount of CRE mortgage debt outstanding signals that much of the drop in originations was driven by a decline in borrower demand stemming from slowdowns in sales transactions and refinances. If property owners had the ability to sit pat, they generally did.”

According to The Warren Group, the real estate data firm that publishes The Commercial Record, a total of $22.34 billion worth of commercial purchase and refinance loans were made in Connecticut in 2023, down 36.58 percent from 2022, when $35.23 billion worth of CRE loans were made in the state.

“All indications are that 2024 is off to a slow start as well,” Woodwell said. “While higher interest rates are likely to continue to act as a deterrent for many property owners, more than $900 billion of maturities – and perhaps acquiescence to those higher rates – are likely to bring some additional deals to the market this year.”