Commercial real estate lending markets remained on the upswing in Q3 2017 with rising equity prices, limited volatility, and tightening spreads, according to the latest research from CBRE.

The CBRE Lending Momentum Index, which tracks the pace of U.S. commercial loan closings, declined slightly from the previous quarter, dropping by 4.7 percent in Q3 2017 to 226. Despite this decline, Q3 2017 lending volume remained up year-over-year by 16.9 percent. While overall sales transaction volume is easing, high levels of maturing loans are creating demand for refinancing.

CMBS conduits continued its streak as top lender, leading all other major lenders in Q3 2017. CMBS origination activity accounted for 36 percent ($27.9 billion) of non-agency loans in the third quarter, matching their market share in Q2 and up 45.3 percent year-over-year ($19.2 billion in Q3 2016). This increase bumped year-to-date issuance to $66.6 billion, well ahead of 2016’s $49.9 billion pace. CMBS originations have been buoyed by stable pricing and the successful formation of capital to satisfy lender risk-retention requirements.

Life companies maintained their standing as the second most popular lending group in Q3, remaining a stable source of funding for lower-leverage loans. They accounted for slightly more than 24 percent of non-agency commercial loan closings in Q3, consistent with their Q2 share and up slightly year-over-year.

“Purchase money and refinancing activity during the third quarter remained robust compared to levels recorded last year. The recent tightening of spreads is a promising sign that liquidity will remain favorable and mortgage rates will remain relatively low, despite the volatility in various indexes,” said Brian Stoffers, global president, debt & structured finance, CBRE Capital Markets.

Bank originations stalled in Q3, accounting for 18 percent of loan volume—well below their 49 percent share a year ago. Banks have been increasingly cautious with their loan underwriting, especially on construction and transitional deals.

The “Other” lender category, which includes REITS, private lenders, pension funds and finance companies, accounted for 20.8 percent of loan volume in Q3, maintaining their share of non-agency volume year-over-year.