A
mixed bag of signals emerged for the US commercial real estate market as 2024 drew to a close. While lending and construction indicators showed promise, design billing lagged behind.

    The commercial real estate lending landscape experienced a significant surge in Q4, driven by capital reallocation and improving fundamentals. Loan originations skyrocketed, with CBRE's Lending Momentum Index soaring 37% year-over-year for the quarter and 21% from Q3. This marked a notable departure from the pre-pandemic average of 229.

    As maturing debt fuels refinancing and investment sales in 2025, lenders are expected to remain active. According to James Millon, US President of Debt and Structured Finance at CBRE, "lenders should be poised for continued growth."

    The Dodge Momentum Index (DMI) also showed resilience, growing 10.2% in December to 212.0 from the revised November reading of 192.3. Commercial planning increased by 14.2%, while institutional planning improved by 2.5%. The DMI's strength extended into January, rising another 6%.

    However, a concerning trend emerged with the AIA/Deltek Architecture Billings Index (ABI) score falling to 44.1 in December 2024. Firm billings have declined for most months since October 2022, indicating a prolonged period of softness and uncertainty.

    Despite this, experts remain optimistic about nonresidential construction spending in 2025, citing the strong performance of the Momentum Index throughout last year.