Latest Finance Trends

Condo financing will remain tough to come by. Recent government policies put a lot of pressure on construction costs, which brought the few projects in the works to a screeching halt. Although, sales and new construction had been slow even before the recent tariff policies. Count on lenders to be very selective going forward and More

Borrowers will see cautious land lending this year. Deals getting funded will most likely be acquisitions or recent acquisitions. Banks will be very selective on land loans and most of the capital will come from debt funds and private money. Lenders will strongly scrutinize the ability of the developer to obtain construction financing in order to assess the probability of being taken out of the loan. Expect land lending to return to more normal levels in 2026 and 2027. The timetable for development financing and securing the necessary equity to go vertical on projects will create the need for land loans the next few years. More

Count on CMBS originations to increase to $100B+ this year. There has been an upward trend in issuance and lower spreads have generally held, leading to more activity. The market seems able to clear the bonds easily as there is healthy demand in the capital markets for bonds. The CMBS market will be liquid, although the amount of capital deployed will be a function of pricing. Keep an eye out for more competition for institutional-quality assets, although more CMBS lenders will consider office once again. More

There will be an abundance of debt options in the student housing space this year with new lenders entering the game. Many capital providers looking for additional yield and portfolio diversification are opening to new property types, including student housing, which should result in greater lending competition and improved terms for borrowers. Freddie Mac and Fannie Mae will be active along with the life insurance companies and many banks. More

Hotel lending will pick up this year, especially as life companies, CMBS lenders, regional and big banks return to the space. Also, watch for the debt funds, bridge and private money lenders to continue swooping up market share. The result is more options and a competitive environment for borrowers. There will be an increase in leverage and more available subordinated debt. Terms will come down to the location, borrower and asset. There will be a push toward branded hotels with strong sponsors. Although, keep an eye out for more willingness to lend on riskier deals such as ground-up construction and heavy repositioning, as well as an increase in capital for independent hotels and resorts. More

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