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CRE Securitized Debt Update

November 4, 2025

Private-Label CMBS and CRE CLOs

Two transactions totaling $1.1 billion priced last week:

1. MSBAM 2025-5C2, A $713.6 million conduit backed by 36 five-year loans secured by 164 properties from Morgan Stanley, BofA, Starwood, and Key.
2. SYCA 2015-WAG, a $390 million SASB backed by a fixed-rate, five-year loan for Sycamore Partners on 207 Walgreens stores across 42 states and Puerto Rico. The properties were acquired in conjunction with Sycamore’s broader take-private acquisition of Walgreens Boots Alliance in late August.

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totaled $128.6 billion, representing a 31% increase from the $98.2 billion recorded for the same period in 2024. 

Spreads Hold Steady

• Conduit AAA and A-S spreads were unchanged at +80 and +115. YTD, they are wider by 5 bps and 10 bps, respectively. 
• Conduit AA and A spreads were unchanged at +160 and +210. YTD, they are wider by 25 bps and 45 bps, respectively.
•  Conduit BBB- spreads were unchanged at +475. YTD, they are wider by 50 bps.
• SASB AAA spreads were unchanged in a range of +113 to +137, depending on property type.
•  CRE CLO AAA and BBB- spreads were unchanged at +135 and +340, respectively.

Agency CMBS

• Agency issuance totaled $2.7 billion last week, comprising $1.6 billion of Fannie DUS, a $727.7 million Freddie K transaction, and $284.1 million of Ginnie transactions.
• Agency issuance for the year totaled $122.5 billion, 35% higher than the $90.9 billion for the same period last year.

Contact Raj Aidasani (raidasani@crefc.org) with any questions.

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Forum Spotlight: Portfolio Lenders

November 4, 2025

Together, Melissa Farrell and Bridget Scanlon (Forum Chairs), Kevin Catlett and Mauricio Duran (Chair-Elects), and Robert Grudzinski and Kevin Pivnick (Past-Chairs) form the Leadership Working Group for CREFC’s Portfolio Lenders Forum. They are supported by Farran Brown, the Young Professionals (YP) Representative for the Forum.

Chair duties include setting agendas and priorities for the Forum and representing the constituency on CREFC’s Policy Committee.

Why it matters: Each Forum interacts and addresses issues critical to their business sector and works to achieve solutions that serve a common purpose. 

• Ensure all voices are heard,
• Assist in finding consensus amidst disparate and converging views,
• Share those views when appropriate with regulators and legislators, utilizing CREFC’s experienced Government Relations Team, and
• Develop new best practices and monitor old ones.

Key Portfolio Lender Focus Areas

Valuation and Rates: 

• Declines in valuations have continued to slow throughout 2025 with the bottom approaching.
• Supply has moderated as absorption continues.
• Loan risk ratings have largely stabilized.
• Overall transaction volume has increased in 2025 but still remains muted.
• Despite the rate declines throughout the year, interest rates remain elevated.
• Underwriting standards continue to be disciplined.
• Operating expense increases, particularly insurance and real estate taxes, have moderated but remain elevated compared to transactions acquired/underwritten several years prior.
  

Lending Pipeline and Appetite: 

• Capital is plentiful with significant focus on private credit.
• Lending volume increased driven mainly by refinances with acquisition volume still muted.
• Increased competition is causing spread compression.
• Capital markets lending remains open from multiple sources and pipelines slowly continue to build heading into 2026. An uptick in refinancing activity has resulted in some portfolio lenders becoming increasingly focused on retaining existing loans and winning new quality business.
• Despite the rate decreases throughout 2025, shorter-term floating-rate and fixed-rate deals with prepayment flexibility remain the most attractive products for borrowers in the market.
• Rates continue to be a high focus with a current market expectation for at least one additional cut prior to the end of the year.

Asset Management: 

• Recent improvement in capital markets conditions has created more tangible financing options for borrowers and increased refinancing activity, alleviating pressure on portfolio lender’s balance sheets.
• Lenders continue to address maturing or challenged loans with a variety of strategies, including loan sales, cooperative asset sales with seller financing, and modifications.
  

• Year-to-date SASB issuance is at a record pace ($76B through October 2025) and lenders are open for business as both transaction activity and loan refinancing pick up pace. 
• Material increase in office loans ($25B of office issuance ytd 2025 vs. $8B of office issuance over the same period in 2024).

What They’re Saying: The effects of shifting policies on interest rates along with economic growth will materially influence lending strategies and market liquidity in 2026, but the expectation is for increasing growth targets for portfolio lenders.

Key Policy Committee matters:

• Basel Capital Proposal
• GSE Changes
• Terrorism Risk Insurance Act (TRIA) Reauthorization
• Bipartisan Housing bills and Road to Housing Act

What's Next? Forum Leaders look forward to presenting CREFC members with an update on their forum at the CREFC January Conference in Miami. As June 2026 approaches, the chairs will seek nominations for the next Chair-Elect to join their leadership slate.

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Bank Regulatory Update

November 4, 2025

While the forthcoming bank capital proposal has dominated recent regulatory headlines, the banking agencies themselves are undergoing significant change. 

Federal Reserve

The Wall Street Journal reported that, according to an internal Fed memo, the agency plans to cut supervision staff by 30% by year-end 2026, reducing the head count from a “previously authorized” 500 to 350.

• Federal Reserve Vice-Chair of Supervision Michelle Bowman announced these reduction-in-staff efforts during a morning meeting.
• Yes, but: In May, its worth noting that Fed Chair Jerome Powell said there would be a 10% reduction in staff across the agency

What’s Next. The article also noted Bowman’s comments that, going forward, the Fed’s supervision and regulation division will move to a flatter management structure.

• The Fed plans to rename its operations unit the “business enablement group” and create a new industry engagement role.

The Federal Deposit Insurance Corp (FDIC)

On October 30, the Senate Banking Committee held a nomination hearing for Acting FDIC Chair to serve as permanent Chair. Hill faced bipartisan scrutiny in his confirmation hearing over the FDIC’s workplace culture.

• Sen. Elizabeth Warren (D-MA) condemned Hill’s actions in response to reports of workplace misconduct at the FDIC.
• Sen. John Kennedy (R-LA) said he would withhold support pending a 30-day report detailing disciplinary actions against offenders. 
• Hill pledged that “reforming the culture continues to be a top priority,” emphasizing accountability and structural reform. 

Members of the Committee also questioned Hill on shifts in regulatory priorities, including a reduction in the number of examiners and emphasis on deregulation.

• Hill defended the small reduction in the number of bank examiners and reiterated his commitment to tailoring regulations by bank size, refocusing supervision on material financial risks and advancing capital framework adjustments.
• Lawmakers additionally pressed Hill on deposit insurance reform, with Sens. Bill Hagerty and Angela Alsobrooks urging expanded coverage for business accounts as outlined in their recent bill.
  

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