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Commercial real estate lending accelerated in 2024 and banks emerged as the dominant lender type nationwide, as well as in Massachusetts.

The CBRE Lending Momentum Index closed the fourth quarter of 2024 at a value of 259, exceeding the five-year pre-pandemic average of 229. This was an increase of 21 percent from third quarter of 2024 and 37 percent year-over-year.

“While there was an uptick in market activity in the fourth quarter, the 80 [basis-point] shift in 10-year Treasury rates and revised rate expectations, led to recalibrations in credit and equity, resulting in the deferral of some deals,” James Millon, U.S. president of debt and structured finance for CBRE, said in a statement. “Despite this, a substantial wall of capital continues to support competitive spreads across a wide spectrum of credit markets, from CMBS SASB and Conduit to CLOs, Agency, LifeCo, Bank, Repo, and Debt Funds.”

Banks accounted for 43 percent of CBRE’s non-agency loan closings in the fourth quarter of 2024, an increase from an 18 percent share in third quarter of 2024 and a 40 percent share a year earlier. Life companies were the second most active lending group, accounting for 33 percent of non-agency loan closings, up from 27 percent a year earlier.

According to data from The Warren Group, the publisher of Banker & Tradesman, the top five lenders in 2024 for purchase and non-purchase commercial loans in Massachusetts were indeed banks. Bank of America led the way with $1.28 bilion in loan volume followed by U.S. Bank with $1.15 billion.

Additionally, banks made $20.39 billion in commercial mortgage loans of all types in Massachusetts 2024. Credit unions made $556.92 million in CRE loans.

Meanwhile mortgage companies and other non-bank lenders like insurance companies made commercial loans amounting to $12.61 billion in Massachusetts in 2024.

And comparing the fourth quarter of 2024 to its counterpart in 2023, bank lending decreased to $7.72 billion from $13.67 billion in the fourth quarter of 2023, a decrease of 43.5 percent. Meanwhile non-bank lending rose from $3.44 billion to $4.31 billion, an increase of just over 25 percent.

For the same time period, credit union lending also increased to $156.88 million from $126.21 million, up 24 percent.

But one trend held true with the national picture described by CBRE: Banks grew their share of commercial real estate lending statewide over the second half of 2024.

Comparing the fourth quarter of 2024 to the third quarter of the same year, banks saw their share of commercial mortgage lending rise from 52.81 percent to 63.36 percent, while non-bank lenders of all types saw their share go from 47.6 percent to 35.34 percent. Credit unions saw their share fall, as well, from 1.9 percent to 1.3 percent.

“Looking ahead to 2025, we expect a more dynamic refinancing and investment sales market, fueled by maturing debt, capital reallocation in closed-end funds, and strong fundamentals across most real estate sectors,” Millon said. “We are particularly optimistic about the resurgence of the office occupier market for top-tier assets in major CBDs. Lenders are likely to leverage loan sales to create liquidity for strategically positioned assets and asset management-intensive properties approaching restructured maturity extensions, allowing them to navigate the evolving market landscape.”