Commercial real estate lending showed extremely positive numbers during the third quarter. This trend should continue and lead to big improvements during the last quarter of the year and into 2026. Loan originations were 36% higher in the third quarter of 2025 compared to a year earlier, an 18% increase from Q2 of 2025, according to the Mortgage Bankers Association’s (MBA) Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations. Office, especially saw a much-needed increase in volume. Industrial only saw a slight increase, while health care lending decreased. Debt fund and banks had an especially active quarter, while CMBS lending also saw a rise.
MBA notes that compared to a year earlier, a rise in originations for office, retail, hotel and multifamily properties led to an overall increase in commercial/multifamily lending volumes. There was an 181% year-over-year increase in the dollar volume of loans for office, a 100% increase for retail, a 66% increase for hotels, a 27% increase for multifamily and a 5% increase for industrial. Originations for health care property loan originations decreased 43% compared to the third quarter of 2024.
CBRE’s research also points to a positive third quarter, noting that stabilizing borrowing costs and tighter credit spreads helped bridge pricing gaps between buyers and sellers and boosted deal activity, according to the latest research from CBRE. The CBRE Lending Momentum Index, which tracks the pace of CBRE-originated commercial loan closings, increased 112% year-over-year, reaching levels last seen in 2018. This growth was driven by a 36% year-over-year increase in permanent loan financing.
Alternative lenders, including debt funds and mortgage REITs, led CBRE’s non-agency loan closings in Q3 2025, capturing a 37% share, up from 34% in the same period last year. Debt funds were the primary driver, with lending volumes up 68% year-over-year. Banks held the second-largest share of non-agency loan closings and showed a strong return to the market at 31%, a sharp increase from 18% last year, as origination volumes surged 167%. CMBS lenders also saw substantial gains, with their share rising to 17% from 5% a year ago, driven by a fivefold increase in lending volume. Life companies accounted for 16% share of non-agency loan volume in Q3 2025, down from 43% a year ago.
CBRE forecasts that key metrics point to a more favorable lending environment going forward. Loan constants decreased by 20 basis points quarter-over-quarter, while mortgage interest rates fell by 28 basis points. The average LTV ratio rose slightly to 63.8%, up from 63.3% in Q2 2025, indicating a modestly less conservative approach by lenders.
These favorable numbers, combined with the Fed lowering rates, an expected increase in acquisitions next year and many lenders and equity investors planning to return to the market, should lead to an overall better commercial real estate environment in 2026.
