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Gantry Reports Steady Commercial Mortgage Production Through Q3 2023 as Q4 Accelerates

Commercial Mortgage Banking Firm’s $18 Billion Loan Servicing Portfolio Continues its Overall Strong Performance; Life Companies Remain Active with Allocation Bandwidth for Qualifying Loans

San Francisco, Calif. – Gantry, the largest independent commercial mortgage banking firm in the U.S., is reporting a steady pace for new loan production through Q3 2023, although current volume remains lower year-over-year after a record 2022. The volume and pace of new production is increasing into Q4 2023, driven by a significant number of rate locked transactions expected to close by year-end, upcoming maturities, and the emergence of price discovery for assets in a new era of higher interest rates.

Market Conditions and Future Expectations

“Market conditions are beginning to normalize and build in a new rate climate, so much so that every quarter of 2023 has exceeded the prior quarter,” said Tom Dao, Principal with Gantry. “We forecast that our 4th quarter production will be our best quarter of 2023 with a solid pipeline already lined up for the 1st quarter of 2024 with maturity forwards.” “This can be directly correlated to near term maturities and movement towards price discovery during a higher cost of capital market cycle. We are beginning to see areas of concern in some markets, particularly in the office sector, due to near term maturities and leasing challenges. However, we are pleased to report strong performance from our portfolio and maintain confidence in the endurance of CRE fundamentals across all asset classes where leverage is conservative, and sponsorship is active.”

Loan Production and Lenders

During Q3 2023, Gantry worked with 43 unique lenders to place a range of permanent, bridge, and construction loans. A majority of loans were sourced from Gantry’s correspondent life company lenders, with banks, credit unions, agencies, debt funds, and conduit lenders following in descending order. Multifamily, retail, and mixed-use were the most represented asset classes in Q3 2023 loan production, with self-storage, industrial, office, and hospitality, following in descending order.

New loan production volumes have been muted throughout 2023 across the commercial real estate landscape, due to rate volatility and a higher cost of capital. Gantry executes on financing assignments and continues to secure creative solutions for sponsors seeking to refinance existing debt, take-out construction loans, leverage bridge financing, or identify rescue capital and related financing solutions.

The firm’s correspondent life company lenders have remained a consistent source for new originations in 2023. Their ability to provide certainty of execution sets them apart from other capital sources in today’s market. Agencies have remained active in the multifamily sector, with both types of lenders backstopping the retreat of banks from the lending space. Most borrowers have shifted their focus to 3- to 5-year term loans with hopes of refinancing in a future lower rate climate and are often attracted to longer term loans only when prepayment flexibility exists. Overall, fixed rate debt is the preferred option for new CRE financing.

“Gantry’s correspondent lenders have remained extremely active in 2023, stepping in to fill the void left in the lending landscape as traditional banks and other capital sources scaled back,” said Adam Parker, Principal with Gantry. “We are currently collaborating with our insurance company correspondents to develop loan structures that we anticipate will gather momentum in 2024. These include participation loans that effectively function as mezzanine debt, providing an attractive alternative to additional equity infusion for those in need. As a company, we feel very fortunate to have relationships with correspondent life company lenders as they remain active and reliable funding sources. Banks can be competitive, but many of them are not active. Credit unions are attractive in today’s environment due to their flexible prepayment penalties. Debt funds are tightening their underwriting criteria but are still accessible for shorter-term loans with a well-defined exit strategy. While CMBS remains an option for borrowers seeking higher leverage, it faces challenges from interest rate volatility.”

Key trends to consider at the close of Q3 2023 include:

Higher Cost of Capital

In the current environment of elevated interest rates, all asset classes are experiencing an increase in the cost of capital. The effects of rising interest rates will influence valuations, debt service coverage, and will have a significant impact on variable rate financing structures as we head into 2024.

5-Year > 10-Year

Borrowers are increasingly seeking financing options with 3- to 5-year debt terms, as they anticipate the possibility of refinancing in the near future, hoping that interest rates will have decreased by then. Borrowers are receptive to the idea of securing longer-term loans with options for prepayment flexibility.

Participation Loans

Lenders, particularly life companies, are introducing novel loan structures with reduced interest rates. They underwrite at a lower rate to participate in the profits generated from operational cash flow and benefit from potential gains upon the sale, typically over a 3- to 5-year timeframe. This strategy is regarded as a mezzanine capital approach.

Life Company Lenders

Gantry’s correspondent life companies are adjusting their underwriting standards in response to decreased competition from other lenders. However, they continue to be the most dependable and steadfast lending options today, offering the best choice for secure, fixed-rate debt within the current market cycle.

Agency Lenders

Fannie Mae and Freddie Mac maintain their strong presence as lenders in the multifamily sector, especially for projects that align with their affordability criteria.

Banks & Credit Unions

Banks persist in adopting a risk-averse strategy, bolstering their liquid reserves, and concentrating on their current clientele. This ensures that they remain accessible to their most valued depositors and remain competitive in retaining their business. On the other hand, credit unions are inclined toward a non-depository approach and can provide adaptable prepayment arrangements. However, their programs generally come with recourse obligations and feature interest rates at the upper range of conventional lending options.

Debt Funds

Debt funds continue to stay in the game, and the reduction in bank lending has directed more deals in their direction. Nevertheless, not all opportunities align with their approach, as most are now adopting a cautious approach by underwriting loan proceeds based on a practical exit strategy at the end of the business plan.

Debt Assignments

Borrowers and sponsors are increasingly relying on Gantry for guidance in managing their financing assignments. This comes as their relationship lenders have significantly reduced their involvement, and they recognize that Gantry offers best-in-class execution and access to capital.


Gantry remains committed to its strategic executive recruitment program, most recently adding Ms. Christine Kim as the firm’s Chief Marketing Officer. In this position, Kim will be responsible for overseeing all aspects of Gantry’s new and existing client outreach, external communications, advertising, and brand identity functions across the full spectrum of traditional and digital media platforms and event programming. Kim joins Gantry from her most recent position as Creative Director, Marketing and Corporate Communications, with Bellwether Enterprise Real Estate Capital.


Gantry, a long-rated Primary Servicer by Standard & Poor’s, continues to see a strong performance from its approximately $18 billion portfolio of serviced commercial mortgages spanning more than 2,100 loans in 43 states at the close of Q3 2023. Gantry continues to monitor near-term maturities in a higher price of capital environment and assets with significant leasing rollover or vacancy.

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