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United States

Report | United States Investment Outlook - Q2 2016


​The second quarter of 2016 began with some angst as financial markets were still recovering from fears of a global economic slowdown and the large declines seen in stock markets in January and February. As markets closely watched oil and the equity markets recover slowly, investors began to feel a sense of safety as volatility averaged only 14.3 on the CBOE volatility index (VIX) and reached a max of 16.3 in April 2016.

After an active 2015—the second strongest year for volumes since 2000, behind only 2007 by 6.3 percent—and with continued macroeconomic uncertainty in markets, volumes remained down at mid-year. With year-to-date declines of 12.9 percent, investment sale volumes are normalizing while remaining above long-term annual averages

As CMBS lending has slowed, two lenders have filled the void: Banks and life insurance companies. Life companies recorded a historic year for originations in 2015 with $76.2 billion, a 25.5 percent annual increase and the lender group’s highest origination volume on record. Commercial banks and other balance sheet lenders who have opportunistically filled the CMBS gap are taking market share. In the second quarter, bank loan originations increased 33.0 percent year-over-year, more than any other lender type.

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