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  • Writer's pictureGantry

Gantry Reports Quiet Q1 2023 for Production as Momentum Builds for More Active Q2 2023

Firm’s Q1 Production Down from 2022 and 2021 Record Highs as Sector Adjusts for Rate Volatility and Price Discovery; Gantry’s $18 Billion of Serviced Loans Across All Commercial Asset Classes Performing at 100% with No Delinquencies Reported

San Francisco, Calif. – Gantry, the largest independent commercial mortgage banking firm in the U.S., is reporting that loan production for Q1 2023 was down significantly from 2022 and 2021’s record highs, reflecting a sustained market slowdown that carried over from Q4 2022 due to rate volatility, negative leverage, and a myriad of related market disruptions. As rates have started to stabilize moving into Q2 2023, Gantry is already seeing an increase in transactional activity and advisory requests with expectation that the pace of new originations will increase moving into Q2 2023.

“Lower Q1 2023 production is a result of higher borrowing rates combined with significantly fewer sales transactions,” said Gantry Principal Adam Parker. “We are beginning to see an uptick in commercial mortgage requests as rates come in and price discovery emerges. For those looking to transact or retire maturities in the year ahead, the certainty of execution provided by our correspondent life company lenders, Fannie Mae, and Freddie Mac is what’s truly separating these lenders from the rest of the market. Many banks are on pause or have dramatically tightened their credit standards and CMBS continues to struggle due to continued rate volatility and softening securities market.”

In terms of capital allocations, Gantry’s 2023 originations through the first quarter were defined by the following (ranked in descending order):

  • Asset Class: Multifamily, retail, self-storage, office, industrial, land lease, healthcare, hotel.

  • Loan Volumes: Life companies, banks, credit unions, bridge lenders, and agencies as top funding sources.

  • Loan Values: Life companies, agencies, credit unions, banks, and bridge lenders for total loan values.

Notable trends in relevant Gantry verticals include:


The dramatic slowdown of transactional activity that emerged in Q4 2022 carried over into Q1 2023, resulting in market wide slowdown for commercial mortgage production as the sector resets for rate volatility, price discovery and capital availability. Looking at Gantry’s completed financings during the quarter, a significant majority were to refinance maturing debt, while requests for financing on sales transactions failed to achieve buyer-seller stabilization on pricing as cost of capital has risen, negatively impacting leverage and debt service coverage.

“Gantry’s demands were as hard as a capital markets advisor in Q1 2023 as any other past quarter, but a disconnect between buyers, sellers, and the new price of capital meant that many transactions did not reach fruition,” said Gantry Principal Michael Wood. “As rates have come in, transaction activity has stepped up. And while many banks are stepping back from new origination, at the same time, Gantry continues transitioning requests to more resilient forms of capital like our exclusive roster of correspondent life insurance company lenders and emerging sources of capital appearing in the market.”

Key Trends
  • Multifamily, industrial, retail (outside of traditional malls), self storage, medical office, and mobile home parks remain preferred asset classes for most lenders.

  • Office remains the most challenged asset class, however Gantry closed several loans on a very select basis with strong underwriting and demonstrated performance. Hotel and resort properties, however, have returned to favor amongst a wide range of lenders as conditions have improved dramatically for the sector post COVID.

  • Life companies have competitive advantages in the current market cycle due to their capital stability, consistency on closing, and ability to lock rate at time of application.

  • Regional and local banks are tightening credit standards and pulling back substantially from new commercial mortgage origination particularly compared to 2022 production levels, while increasing depository relationship and recourse requirements.

  • Borrowers increasingly need to go beyond their own bank capital sources to identify viable financing sources and expanded relationships in the wider capital markets, generating demand for advisory services.

  • Construction financing requests have increased substantially for life company lenders as banks are backing off new construction origination.

  • CMBS remains a handicapped financing option, struggling with cost and pace of underwriting, rate uncertainty in a volatile climate, and softening investor interest.

  • Expected defaults on maturing or non-performing CMBS loans will increase the role of special servicers and alternative funds in 2023. In tandem, as the year moves forward, maturing loans that result in forced sales or foreclosure will motivate cap rate discovery and capital basis change as loans are sold or taken over by lenders.


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 Q1 2023. The portfolio’s Q4 2022 performance reporting has also shown improved metrics in areas such as debt coverage ratio and occupancy beyond what was forecasted. These loans represent financings in every asset class, including office, which remains 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 strengthen and grow its production capabilities with strategic new hires. In Q1 2023, James Ruiz joined the firm as a Senior Director working from Gantry’s Irvine, Calif., production office. Ruiz will be directly responsible for developing a loan production pipeline and client roster to align with Gantry’s more than 100 correspondent and affiliated lenders. He has closed more than $2 billion of transactions during a 23-year career in commercial mortgage finance, working on a significant volume of unique financings for acquisitions, refinances, and construction of all property types.

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