Sara Havlena

Keep an eye out for more life company lending this year, as many lenders plan to surpass last year’s total origination numbers. Life companies will try to capture more business by expanding their boxes. Watch for them to be more flexible in the type of retail properties they will consider, moving away from the traditional grocery-anchored centers. There will be a push toward more construction-to-perm and bridge loans as a way to grab yield. Anticipate life companies starting to compete on pricing and increasing leverage. Also, count on more flexible prepayment options. Look for sensitivity around higher insurance costs. The focus will be on strong experienced sponsors. More

Multifamily construction capital will increase as investors become more realistic with long-term rates and lenders are recycling capital as loans mature. Regional and local banks have started to re-enter the space, which should continue as rates decrease. Although financing will be available, lenders will be more selective and there will be a higher cost of capital. Anticipate a flight to quality for strong projects and experienced sponsors. The biggest hurdle is not being able to make the numbers work in today’s market. Caution around overbuilding and concerns about rents will continue to keep some lenders at bay. More

There is a positive outlook for office lending this year with meaningful market improvements and increased liquidity. CMBS lenders are back and targeting office assets that are performing well in strong markets. Banks will slowly and selectively re-enter the space in 2025 with building sales, refinancings and loan sales removing office loans from their balance sheets. Life companies will have some appetite for newer quality office product at a lower leverage. There will be a flight-to-quality trend that should persist for well-occupied properties. More

Borrowers will see an increase of capital in the single-family rental (SFR) and build-to-rent (BTR) space this year. Construction financing will be available for strong BTR projects backed by top-tier sponsors. Lenders feel this is a solid asset class and rents are expected to grow in most markets. This is also a highly attractive housing solution for many tenants versus traditional multifamily communities. Look for more demand for refinances as many sponsors decide to hold properties as rates go higher and asset values are down. More