As we turn the first pages of 2025, Gantry is pleased to report a 40% increase in new loan production in 2024 over 2023. It was a good year in that way. While not our best year and still a challenging period for a market sludging through rate volatility and a higher cost of capital, our client’s transacted. Change is now in the air. As we move into 2025, let’s take a minute to appreciate the work we’ve done as we prepare for the new year to come.
Delivering the Present
We are consistently finding success matching clients to quality mortgage and debt equity options. Liquidity continues to be abundant in a market more challenged by debt service capacity than ready access to capital sources. Our lineup of active correspondents stands as one of the largest amongst our peers providing us unique access, and our overall roster of vetted lenders has only continued to grow. Gantry’s role as a trusted intermediary for both lenders and borrowers alike puts us in a unique position to tailor financing solutions that address specific client needs in a cycle where creativity is more important than ever.
Investing for the Future
Gantry made substantial investments in our operations during 2024. Because of our employee-owned, independent structure, Gantry has been able to take advantage of our growing scale and track record to attract like-minded talent and further grow our platform to better serve clients. The addition of Triad Capital Advisors to the Gantry platform has provided us with “boots on the ground” connecting our Western States and Eastern Seaboard presence from key Midwest markets, and our merger with Westcap has added experienced production talent to our Southern California team. Further, we added key loan production talent in critical markets to bolster bandwidth, including a new presence in New York City.
Working with Lenders
Our relationships with our lenders have never been stronger. This has afforded us ample bandwidth to work on asset specific underwriting and unique term agreements in a volatile market. Gantry’s time-tested correspondent relationships with most of the nation’s top insurance company lenders has proven to be a critical strength in backfilling the absence of regional and local banks from the commercial mortgage markets, a role these time-tested lenders will continue to play in 2025.
Servicing for Stability
We are extremely proud of the work our servicing team has accomplished in recent years during a tumultuous cycle for commercial real estate. We believe that while loan performance begins with copious underwriting, a collaborative approach to servicing can provide borrowers with better outcomes if, or when, disruption hits. The overall positive performance of our $23 billion portfolio is a direct reflection of our servicing team’s diligent efforts to align borrower circumstance with lender interests. We only hire professionals, and we do not outsource this vital role. This approach has proven exceptionally valuable to our clients refinancing pending or near-term maturities in the current rate climate. We focus on long-term relationships, not just origination. Our servicing teams are directly embedded with our loan producers, and work closely with both borrowers and lenders to cut through the maze and reach satisfactory outcomes.
The Quarter to Come
There will be a new administration and congress taking office in January. Change is in the air. Surely extending or modifying the tax code will be a hot topic affecting our industry. So will rates, inflation, and the overall direction of the economy. It's hard to predict what role geo-political conflict or unforeseen economic disruption might play in the year to come, but U.S. economic fundamentals remain essentially healthy as we move into 2025. We have seen a full 100-basis point cut by the Fed to close out 2024, while at the same time a corresponding rise in treasury yields after improvement earlier this year. 10-year yields are now in a 4%-4.5% range. Where we are heading from there will be apparent by the MBA-CREF in February 2025 and expect we will have relevant updates before then.
This could be a year of reckoning for owners of CRE who have legacy floating rate debt where interest rate protections are burned off, right at a time where equity investors are pressing for redemptions. We could see sales exponentially grow in 2025. Short term rates are drifting down, but nowhere near the level where legacy deals were closed.
Anyone thinking that rates will plummet in the near term seems to be taking a gamble as we continue to see headwinds pointing to ongoing rate stress in the year ahead. We have been operating for an extended period in a higher rate climate, and we are prepared.
In Closing
At Gantry we remain solely focused on commercial real estate finance and commercial mortgage banking - loans, equity, and servicing. We approach our work as one team, seamlessly integrated across production, servicing, and operations. We have prepared for 2025 by growing our team and deploying the necessary infrastructure to best serve our clients wherever they do business. We look forward to hearing from you in the year to come! Until then…Happy holidays and warm wishes for an exciting new year!