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Gantry Continues 100% Performance of $18 Billion Loan Servicing Portfolio; Production Remains Muted

Liquidity in the Capital Markets Remains Active Even as Banks Retreat and CMBS Underwhelms; Maturing Loans and Price Discovery Should Increase Originations in H2 2023; Gantry Highly Prepared to Weather Cycle Lows and Committed to Growth via Talent Attraction and Retention

San Francisco, Calif. (July 21, 2023) – Gantry, the largest independent commercial mortgage banking firm in the U.S., is experiencing a year-over-year decrease in commercial mortgage production through H1 2023. Volatile commercial real estate markets have remained consistent since H1 2022 as market participants continue to grapple with price discovery, higher rates, maturing loans, distress, disrupted fundamentals, and banking fallout.

This prolonged adjustment to a new rate climate has essentially reset the entire landscape for commercial real estate investment moving forward. Gantry is counseling clients to remain disciplined as options exist but to expect that rates, especially when compared to the historically low rates that defined the past ten years, will most likely remain higher for the foreseeable future. This is already showing to have an outsized impact on maturities and during the next 2-3 years, it may ultimately require new capital infusions or other rescue capital to successfully navigate.

“Typically, we would report overall production volume at this time of year but, as we are in the anomaly of a major cycle shift, let it suffice to say that new commercial mortgage production is at a low point as the market resets on a number of fronts,” said George Mitsanas, Principal with Gantry. “However, this does not indicate wholesale distress across the commercial real estate markets, as liquidity exists, and the economy remains strong with most asset classes and properties performing as underwritten. This is supported by the 100% performance of Gantry’s $18 billion loan servicing portfolio. Gantry is well prepared as a private company owned directly by its producers to weather the current cycle, and we will continue to serve clients and invest in our future via workforce retention and recruitment, including 2023 summer internships.”

During H1 2023, insurance companies and agencies were by far Gantry’s most active lenders for new loans as banks and credit unions continue to retreat from origination to focus on deposits and shoring up liabilities, CMBS spreads continue pricing higher than other forms of available capital, and debt funds throttle back on risk by limiting allocations, increasing pricing, and tightening underwriting. Gantry placed loans across all the major asset classes, including office, which remains the most challenged of the property types. Most loans were for industrial, retail, multifamily, and self storage properties with Gantry’s insurance correspondents or the agencies.

A few highlights from key Gantry verticals include:

Gantry has been very active in executing on financing assignments and is pleased with the loans it has secured for sponsors during the first half of the year. The focus has been on positioning clients to ride out this cycle by placing them in conservative, fixed rate, low leverage loans with accurate valuations at terms of five years or longer depending on the individual property specifics. The firm’s extensive roster of correspondent life company lenders has been a particularly consistent source for these new originations in 2023 and provides certainty of execution that other capital sources aren’t able to offer in today’s market. Agencies have remained active in the multifamily sector, with both types of lenders backstopping the disappearance of banks from the lending space. Since yield curve inversion has increased the price of shorter-term debt over longer term options, and upward rate volatility has proven disastrous for the cost of caps and maturities, fixed rate loans with legacy terms are appealing to ride out the current cycle when an option.

“Gantry continues to execute on our sponsor’s financing needs and business plans, even while faced with headwinds of meeting debt service requirements with higher interest rates and maximizing proceeds with creative structures. This is done through an extensive marketing process on each loan assignment and access to best-in-class capital sources,” said Andy Bratt, Principal with Gantry. “Our insurance company correspondents have been dependable through the turmoil that has roiled many banks and they remain the consistent, reliable capital source for low leverage, longer term debt, as well as on a selective basis shorter term and construction financing. Agencies have also remained active and continue to deliver great outcomes for experienced sponsors. Banks are still accessible on a case-by-case basis but are keenly focused on only serving their best clients and/or large depositors. We may be working harder on each assignment, but we are financing with certainty of close at attractive rates for a wide range of assets and qualifying sponsors.”

Key trends to consider at the close of H1 2023 include:

Insurance Company Lenders

For low leverage borrowers, Gantry’s correspondent life companies are the best option for financing in the current market cycle.

Agency Lenders

Fannie Mae and Freddie Mac continue to be active lenders in the multifamily sector, particularly when projects meet their affordability requirements.

Higher-Rate Cycle

Expect a higher rate environment to stick into the coming year and foreseeable future as the Fed continues to seek equilibrium that will dampen inflation.

Era Shift

The dramatic increase to rates beginning in 2022 marked the beginning of a new era for commercial real estate financing, one that begins at the end of one of the longest periods of hyper low interest rates and economic growth in modern history.

Bank Health

Banks have been the hardest hit lender in terms of diminished liquidity in the current cycle as rates climb and their depositors move cash to other, higher yielding investments. Expect banks to require significant time to work through shoring up their balance sheets and adjusting operating strategies to survive in a higher rate climate before their active return. Loan sales to move assets off bank balance sheets are expected to broaden and require advisory services.

Debt Assignments

Borrowers and Sponsors are leaning on Gantry more than ever to help navigate through financing assignments as their relationship lenders have pulled back significantly and understand Gantry has best in class execution and access to capital.

Office Struggles

While all sponsors of every asset class will have to address the rising cost of capital as they seek to refinance debt from past, lower interest rate loans, office borrowers are also dealing with a fundamental change to the future workstyle. This massive change will be the root of major distress particularly in the primary downtown markets.


Gantry continues to invest in the future of commercial mortgage banking through mentorship and development of a new generation of commercial mortgage finance professionals. This summer the firm welcomed five paid interns to positions within its California and New York production offices pairing them with senior staff on new transactions, portfolio assessment and industry introductions. Gantry remains committed to its executive recruitment programs, most recently adding a Senior Director with more than $1.0 billion in career transactions to its production team in Q1 2023.


Gantry, a long-rated Primary Servicer by Standard & Poor’s, continues to see 100% performance from its approximately $18 billion portfolio of serviced commercial mortgages spanning more than 2,100 loans in 43 states as of H1 2023. These loans represent financings in every asset class, including office, which remain the most challenged sector in the current cycle. Gantry is also a primary servicer for CMBS loans and anticipates that demand for distressed loans will increase as significant CMBS debt placed in 2013 and 2014 in Gantry’s primary markets reaches maturity and occupancy trends in office continue to evolve. Gantry continues to actively monitor its portfolio with significant scrutiny for any upcoming loan deterioration.

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