A renewed sense of optimism is rippling through commercial real estate debt markets. After two years of sluggish activity, both securitized and agency lending are showing signs of a meaningful rebound—though lenders remain highly selective.

Lending Activity Accelerates

Recent projections indicate a notable uptick in issuance volume across multiple debt categories:

• CMBS conduit deals are forecast to reach $35 billion in 2025, up 6.4% from last year.
• CRE CLOs are staging a major comeback, with issuance expected to surge 274% to $32.5 billion.
• Single-borrower large loans are also rebounding, with volume projected to climb 28% to $90 billion.

These trends suggest lenders are slowly returning to the market, encouraged by improving fundamentals and growing investor demand—particularly in industrial and multifamily sectors.

Agencies Regain Their Footing

Government-sponsored enterprises are back in the game in a big way. Both Freddie Mac and Fannie Mae are anticipated to originate $65 billion in loans this year, marking a roughly 19% increase over 2024 levels. The uptick points to growing confidence in the multifamily sector and a broader thaw in the financing environment after a prolonged slowdown.

Pricing Reflects the Risk Spectrum

Debt pricing continues to mirror the risk profile of each asset class:

• Freddie Mac: 5.71%
• Fannie Mae: 5.74%
• CMBS conduit: 6.63%
• CRE CLOs: 7.62%
• Single-borrower large loans: 8.30%

Agency loans remain the most cost-effective source of capital, while floating-rate and risk-adjusted vehicles such as CLOs and single-borrower deals command higher yields.

Market Insight from the Top

Blackstone President and COO Jonathan Gray noted a shift in the market, pointing to reduced construction activity and renewed investor focus on logistics and multifamily assets as early indicators of stabilization. With the Fed beginning to ease interest rates, capital is cautiously returning to the market.

The Bottom Line

Commercial real estate lending is picking up speed heading into 2025, signaling renewed confidence across both public and private debt markets. Still, lenders are proceeding with discipline—prioritizing quality, structure, and borrower strength. Momentum is back, but scrutiny is here to stay.