Commercial real estate lending activity remains positive after the Federal Reserve took steps to calm financial markets’ growing concerns over sluggish global economic growth and ongoing trade disputes, with two interest rate cuts in the third quarter (and one in late October), according to the latest research from CBRE.

The CBRE Lending Momentum Index, which tracks the pace of commercial loan closings in the U.S., reached a value of 264 in September 2019—up 8.2% from June’s close. Compared with a year ago, the CBRE index is up 5%.

“The shift in Fed policy has supported the capital market environment for commercial mortgage originations,” said Brian Stoffers, Global President of Debt & Structured Finance for Capital Markets at CBRE.

“Underwriting on loans tracked by CBRE became more aggressive in Q3, marked by declines in underwritten cap rates and debt yields, and reversing the trend from Q2. The percentage of loans carrying either partial or full interest-only terms rose to 67.9%, a new high,” he added.

READ ALSO : Commercial lending activity in U.S increases in Q2 2019

CBRE’s lender survey indicates that life companies and alternative lenders (includes REITs, finance companies, debt funds) had another strong quarter and led origination activity in Q3 2019. Each lender group accounted for close to 30% of non-agency commercial mortgage closings. While Banks’ market share declined slightly, CMBS lenders’ share rose.

Life companies accounted for close to 29% of non-agency lending volume in Q3 2019, up from a 26% share in Q2 2019 and 18.6% from a year ago. Life companies continue to have relatively active deal pipelines, particularly for lower leverage deals. Life company loan-to-value ratios (LTVs) averaged 56% in Q3 2019, compared with an overall average of 67.2%.

READ ALSO : U.S commercial, multifamily mortgage originations up 24% in Q3

Alternative lenders accounted for close to 30% of non-agency lending volume in Q3 2019. So far this year, these lenders have gained market share, rising from 17% in Q1 2019 and 25.6% in Q2 2019.

Banks’ share of lending originations fell to 24.2% in Q3 2019 from 35.2% in Q2 2019 and 29.3% from a year ago.

Despite some volatility, CMBS quotes have improved and many lenders have growing pipelines for the remainder of 2019. Among the originations tracked by CBRE, CMBS lenders accounted for 17.1% of volume in Q3 2019, up from 13% in Q2 2019 and 14.5% from a year ago.