CMBA 2025: Key Takeaways

By Robert Slatt

It was great to catch up with Gantry’s commercial mortgage financing peers at the MBA’s annual Western States Commercial Real Estate Finance conference last week in Las Vegas. An upbeat but still cautiously optimistic vibe permeated amongst attendees and the common refrain was: we are ready to do business. From focused conversations with more than 50 lenders across the spectrum of capital sources to floor chats and panel discussions, common themes focused on resilient fundamentals, an improving rate climate, and ready liquidity available for allocation to CRE debt and equity. Some key takeaways:

1. Lower Treasury Yields: Yields on the 10-year have improved for CRE in a meaningful way, with more than a 30-basis point drop from August into September. If this trajectory sustains for Q4 into 2026, we should see a return to the popularity of long-term permanent debt options.

   
   

2. Fiver-Year Loans in Demand: The five-year permanent loan term has become a pivot in the current market cycle for both borrowers and lenders. This has grown the number of lenders competing in this space, including insurance companies and CMBS lenders.

   
   

3. Rising Loan Volumes: Most lenders report loan volumes returning to levels that mirror two years ago, a good sign for the market as asset trade increase alongside a substantial crop of maturities.

   
   

4. Construction & Development: While development financing remains abundant and readily available, volatility in the pricing of labor, land and materials costs continues to suppress new projects.

   
   

5. Insurance Companies: Gantry’s insurance correspondents remain active in pursuit of their 2025 loan targets and competitive on qualifying assets for their non-recourse loan programs. They have adapted to the current cycle by pursuing five-year terms and higher yield bridge loans.

   
   

6. Banks Are Back: Banks are back after a two-year hiatus. They are competing for both stable loans and construction debt. Banks have stepped back from onerous deposit requirements but continue to require recourse and performance covenants.

   
   

7. CMBS On the Rise: CMBS continues to grow in popularity even with its more intensive execution and B-piece risk. Five-year executions are more prevalent over traditional 10-year terms.

   
   

8. Debt Funds Expanding: Debt funds have grown their position in financing both bridge and construction debt, with substantial capital migrating into the sector this cycle to seek enhanced returns.

   
   

9. Agencies Stay Strong: Agencies remain a top source for multifamily permanent debt, particularly on assets of B quality and below. Insurance companies present a compelling option for qualifying assets, with their streamlined underwriting, rate lock, and non-recourse terms.

   
   

10. Targeted Asset Classes: Multifamily, industrial, retail, and, in many instances, self-storage remain the most desired asset types targeted by lenders. Office is making a strong comeback after more accurate valuations and improving performance, with medical office a particular bright spot. Hospitality remains a case-by-case basis.