Latest Finance Trends

Bridge lending should start to pick up, especially as banks slowly come back to the market. Borrowers will favor bridge loans for their speed, flexible terms and ability to finance transitional properties, especially as long-term financing remains expensive. Anticipated interest rate declines could boost borrower confidence, increasing bridge loan demand as investors capitalize on value-add opportunities. However, bridge lending could continue to see low deal volumes for the next two years due to high interest rates, lender extensions and no forced liquidations. More

Office lending will start to pick up as most lenders have returned to the space. However, expect lenders to be very selective going forward. There will be a flight to quality and top-tier CBD office with favorable occupancy will be the most sought after. Suburban office with strong performance, cash flow and credit metrics will also see lender dollars. Capital providers are seeking buildings in growth markets with demographic momentum and low remote-work industries. More

Financing for hotels will pick up going forward because of the continued solid performance in the sector, increasing demand for acquisitions and the lack of lender appetite for other asset classes such as office. The biggest trend will be the reemergence of bank financing for acquisitions and refinances of performing properties. Lender appetite for the various brands is approaching saturation points in certain regional markets, particularly at the community bank level. More

Construction financing will continue to be tough because of less development, tariff volatility, rising costs and overall uncertainty. Although, look for a ton of available capital from the non-bank stretch senior debt funds. More

Borrowers will see plenty of available capital for self storage. Life companies plan to increase allocations this year, CMBS lenders have returned to the market and regional banks will be a larger player, particularly for bridge and construction debt. Self storage has been stable and boasts the lowest default rate of any of the property types. Lenders are starting to take notice of property performance and increasing demand drivers. More

Borrowers will see an increase in industrial loans this year, especially with the boom in e-commerce and many companies trying to optimize their supply chains. Liquidity in the debt markets will continue to increase, underwriting fundamentals will hold and the race for spreads to bottom will continue. Many life companies are prioritizing industrial loans this year so watch for them to stretch underwriting to compete. Lenders will target acquisition and refinance loans. More

There will be equity capital available, but the numbers do not make sense for many deals in today’s market. Therefore, some investors will remain on the sidelines. That could change next year as supply waves are absorbed, since demand is not the problem. Anticipate a push toward opportunistic deals such as recapitalizations and rescue capital. Count on pref equity to be liquid and competitive, while JV equity continues to be difficult to come by. More

Look for more available capital for retail deals going forward. Transaction activity is improving and the return of regional banks to the market will increase competition and put downward pressure on spreads. Watch for lenders to become selectively more aggressive for properties beyond grocery-anchored retail and look at many different types of properties such as More