Commercial property activity has declined substantially this year, but it isn't for lack of demand. Cash equity seeking commercial property deals is at an all-time high, according to data from Reonomy. At the close of 2019, there was $147 billion in cash equity available for commercial property acquisitions, and in the first half of 2020, nearly $24 billion had been raised. However, lender appetite for commercial property debt has dwindled, and the lack of debt financing had impacted commercial property investment.

This year, dollar volume for commercial property has decreased by 46% year-over-year through July 2020, and deal volume has decreased 37%, despite the availability of cash equity, Reonomy reports. Hospitality had the biggest decrease in deal volume, but all assets classes saw a significant decrease. In addition lenders' lack of appetite for commercial assets has impacted price discovery, further deterring transaction volumes. This may trend may continue to negatively impact transaction activity for several quarters.

While lending activity has slowed for commercial properties, corporate borrowers have continued to secure more debt. The low interest rate environment—designed to fuel lending activity—has encouraged corporate borrowers. According to SIFMA, corporate debt issuances increased 80% in the first half of the year compared the first half of 2019. Although corporate debt issuances are increasing, lenders are more focused on credit in today's lending environment. As a result, high yield issuances have increased less than half as much as investment-grade issuances. On the other hand, CMBS issuances have decreased by 25% through the first half of the year, according to Reonomy. This illustrates the decreased appetite for commercial properties.