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Major banks cut commercial real estate loans by up to 8% YoY, led by Wells Fargo (-8%) and U.S. Bank (-5%). Private credit funds now hold nearly $300 B in bank-financed loans — triple a decade ago — and are stepping in with higher-cost bridge and construction debt.
📊 Quick Dive
Non-bank lenders are quoting 7–9% bridge rates with ~60% LTV, replacing cautious banks.
Bank OZK saw $2.4 B in loan payoffs vs. only $700 M new originations — a five-year low.
Moody’s warns small banks face risk as exposure to private credit balloons.
Read Full Signal
Deal Surge Hints at Market Rebound
U.S. CRE sales hit $124 B in Q3, up 16% YoY and tracking toward $140 B once final revisions post — the first annual rise in six quarters. September led the rebound with $42 B in deals (+19% YoY) and a 69% spike in office trades. Cap rates stabilized at 6.38%, with industrial even compressing 25 bps MoM. Brokers report buyer-seller alignment returning and capital sources re-engaging. Read Full Signal
Industrial REIT Goes Private in $2.1 B Buyout
Plymouth Industrial REIT will be acquired by Makarora Management and Ares Management for $22/share, a 50% premium to pre-rumor pricing. The buyers secured $1.4 B in financing (~65% LTC) and are betting on continued logistics demand amid 97% portfolio occupancy. The transaction underscores robust capital appetite for stabilized industrial — and growing privatization of undervalued REITs. Read Full Signal
Office Vacancy Finally Ticks Down
After six years of steady increases, U.S. office vacancy fell to 22.5% in Q3, the first drop since 2019. Net absorption hit +6.1 M SF, led by Amazon’s 1 M SF lease in Seattle and Goldman Sachs’s 700 k SF in Dallas. Construction has nearly frozen (just 6 M SF under way vs 50 M in 2019), helping vacancy stabilize. Class A rents are firming, while obsolete B/C assets still face pressure. Read Full Signal
North Dallas Retail Rents Hit $50/SF
In Prosper, Celina and Melissa, retail rents have surged 40% in five years, topping $50 NNN/SF as construction costs jumped 20%. National tenants are paying record rates to reach wealthy suburbs (avg household income >$130 k). Recent grocery-anchored trades priced near 6.0% caps, signaling investor confidence despite affordability limits for local tenants. Read Full Signal
Capital markets are in transition. Traditional banks are retrenching while private funds deploy record liquidity. For operators, that means dual-track financing: pursue alternative debt now, but stay ready to pivot back to banks once policy relief and Fed cuts take hold.
Investors should update underwriting to current pricing realities — higher cap rates, lower leverage, and slower rent growth — while remaining nimble. The recent Q3 rebound shows that capital is flowing again for well-underwritten, cash-flow-durable assets.
Fed Watch: Rate cut expected late Q4; spreads may stay wide until inflation data confirm disinflation.
Private Credit: Regulators eyeing the $300 B non-bank loan exposure; any stumble could tighten that spigot.
Deal Momentum: Q4 volume likely to post another double-digit YoY gain as buyers rush to close before year-end.
Industrial Consolidation: More REIT take-privates likely if valuations remain below NAV.
Office Turnaround: Early leasing strength may firm cap rates 25–50 bps by mid-2026.
