CRE Lending Momentum 2025

The Lending Resurgence

After years of uncertainty, commercial real estate lending has staged a remarkable comeback. CBRE's Lending Momentum Index jumped to 1.04 at the end of Q3 2025, its highest reading since 2018. This represents a 112% increase from a year earlier, driven largely by a 36% surge in permanent financing.

The recovery didn't happen overnight. Q1 2025 saw the index increase 90% year-over-year, surpassing 300 for the first time since Q1 2023. By Q2, it had reached 275 (up 45% year-over-year). September 2025 posted some of the strongest origination volumes in years.

Who's Lending?

The lender landscape has shifted significantly. Alternative lenders (debt funds and mortgage REITs) now command 37% of non-agency loan closings, up from 34% a year earlier. Debt fund volumes increased 68% year-over-year.

Banks have made a notable comeback, capturing 31% of non-agency closings compared to just 18% a year ago. CMBS lending surged from 5% to 17% market share, driven by a fivefold increase in volume. Meanwhile, life companies saw their share drop dramatically from 43% to 16%.

Spreads Are Tightening

Credit conditions have improved alongside volume. Commercial mortgage loan spreads averaged 183 basis points in Q1 2025, down 29 bps year-over-year. Multifamily spreads narrowed to 149 bps, the lowest since Q1 2022.

Government agency lending for multifamily reached $44.3 billion in Q3 2025, reflecting 53% quarter-over-quarter growth and 57% year-over-year gains. CBRE's Agency Pricing Index fell to 5.6%, down 13 bps from the previous quarter.

The MBA Forecast

The Mortgage Bankers Association expects total CRE originations to reach $827 billion in 2025, marking a 24% jump from 2024. Of that total:

• $417 billion from multifamily loans
• $410 billion from other commercial property types

According to Judie Ricks, Associate VP of CREF Research at MBA, originations rose year-over-year during the first half of 2025, and she expects this momentum to continue into 2026.

What This Means for Capital Advisors

The lending resurgence creates both opportunity and competition. With more capital available, deal flow is increasing. But lenders have also become more sophisticated in their evaluation processes.

James Millon of CBRE noted that "office financing and sales volumes have surged by multiples, not percentages, driven by strong fundamentals in the best assets in high-growth markets." He expects current momentum to carry into 2026.