🚨CBRE’s Lending Momentum Index rose 45% YoY in Q2 2025 to 275, signaling a broad rebound in loan closings despite April–May jitters. Alternative lenders led non-agency volume (34% share) while CMBS nearly doubled its share to 19%, filling gaps left by selective banks (24%). Pricing is more predictable: average fixed-rate spreads ~193 bps (commercial); ~150 bps (multifamily), with agencies printing ~5.7% 7–10yr rates by quarter-end. For CRE, that equals a more liquid market with disciplined leverage and clearer refi paths.
CBRE Lending Momentum Index: 275, +45% YoY (Q2 2025).
Lender mix (non-agency): Alt lenders 34%; Banks 24%; Lifecos 23%; CMBS 19% (Q2 2025).
Average fixed spreads: ~193 bps (commercial); ~150 bps (multifamily) vs UST (Q2 2025).
Underwriting: LTV 63.3% (↑ from 62.2% Q1); agency 7–10yr rate ~5.7% (Q2 2025).
Loan Performance. Stabilized assets clear 1.30× DSCR more readily with slightly lower loan constants (-21 bps QoQ) and tighter corporate spreads; higher NOI certainty sees more IO upfront on core assets. Weaker NOI or lease-up profiles still need escrows, sweeps, and lower LTVs.
Demand Dynamics. Multifamily and industrial dominate lender appetite (agency competitiveness; logistics durability). Office remains case-by-case with structure (recourse/reserves) and conservative sizing; necessity retail is bank-friendly at modest leverage.
Asset Strategies. Prioritize DSCR durability: fix caps/floors through maturity; tranche capex tied to leasing milestones; stage TI/LC to protect coverage; pursue supplemental/mezz only where debt yield ≥8–9%.
Capital Markets. CMBS’ return broadens options for stabilized assets (higher leverage, longer IO). Debt funds are competitive on transitional (bridge) but price risk; banks selectively re-enter for low-leverage, clean cash flows. CBRE
Rates/spreads: Stable to slightly better; predictability is back.
Favored assets: Multifamily & industrial; necessity retail next.
Financing stance: Lock fixed where DSCR pencils; float only with hedges and clear de-risking.
Spreads/structure: CMBS tighter; still expect covenants, sweeps on hairier stories.
🛠 Operator’s Lens
Refi. Shop lifeco/bank/CMBS/agency simultaneously; lock ~5.7–6.0% 7–10yr fixed if DSCR ≥1.30× and business plan is steady.
Value-Add. Use debt-fund bridge with pre-set future-funding for capex; target debt yield ≥9% at stabilization to ensure perm-takeout.
Development. Run pro formas at today’s spreads +50 bps stress; sequence GC/FF&E to coincide with loan draws; protect IO runway.
Lender POV. Banks prefer ≤60% LTV core; lifecos bid best-in-class low leverage; CMBS rewards diversified cash flows; debt funds price complexity quickly but at higher coupons. CBRE
Policy/data: With rate volatility lower, lender competition can trim 10–20 bps in spreads if H2 issuance stays orderly.
Market confirmation: Watch CMBS conduit BBB– spreads for further tightening and conduit deal cadence.
Risks: Office fundamentals; regulatory capital for banks; sudden rate re-risking.
CBRE — Commercial Real Estate Lending Rebound Continues Despite Market Challenges (Aug 11, 2025). CBRE — U.S. Capital Markets Figures: Q2 2025 — Investment & Lending Activity Continue to Improve (Aug 5, 2025). Trepp — US Conduit Loan Spreads (TreppInsights) (accessed Sept 28, 2025). Trepp — CMBS Conduit Spreads Tighten to Early 2024 Levels (Sept 2025).
showing the share of B/C office properties with ≥10% cap rates declining from 74% in H2 2024 to 71% in H1 2025.
