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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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Government Shutdown Continues

November 4, 2025

The federal government shutdown continues into this week, though there seems to be a shift to a desire to end it as the impacts ripple through the economy and test public patience. 

• President Trump recently weighed in, calling on the Senate to end the filibuster, also known as invoking the nuclear option. 
• This would remove the 60-vote threshold in the chamber to pass major legislation and would allow Republicans to quickly end the shutdown on a partisan vote. 
• Senate Majority Leader John Thune and other key GOP senators support maintaining the filibuster.

The big picture: 

• Federal workers continue to miss paychecks. Members of the military were paid on Oct. 31, but they could miss an upcoming paycheck on November 14 if the shutdown is not resolved.
• Food stamp benefits have run out of money for November potentially impacting 42 million recipients. Some states are trying to tap emergency reserves as federal officials said there is no money available. This is the first time ever that a lapse has occurred in the SNAP program.
  • A federal judge has ordered the Trump administration to send out the funding for food stamp benefits; it remains to be seen however if they will do so.
• Insurance premium notifications for exchange policies went live on November 1. The higher prices could boost Democrats’ calls for action on expiring Affordable Care Act subsidies. Democrats singular policy demand to end the shutdown has been an extension of these subsidies, and the higher prices could start to make Republicans feel the pain from their constituents back home.
• Air travel strains under shutdown: Flights are still running, but the system’s under growing stress. TSA and FAA staff are working unpaid, leading to mounting fatigue and rising call-outs among air traffic controllers. The FAA reports staffing-related delays now cause more than half of flight holdups—up from just 5% before the shutdown.

Why it matters: The effects of the government shutdown will only continue to worsen as it enters its second month. It’s unclear what the tipping point will be to end the shutdown, but it looks likely to set a new record as the longest shutdown in US history.

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Economy, the Fed, and Rates…

November 4, 2025

Economic Data & Inflation

• Corporate Layoffs Accelerate Amid AI Disruption: Amazon announced 14,000 job cuts, joining a wave of 31,800 office-based job cuts across major corporations this week. Companies are explicitly citing AI implementation as a driver—Amazon’s Beth Galetti noted the need to be “organized more leanly” to capitalize on AI opportunities. US companies have announced nearly 1 million job cuts YTD through September, the highest since the 2020 pandemic.
• White-Collar Recession Fears Mount: The labor market dichotomy is deepening. While blue-collar sectors like construction see increased openings due to immigration restrictions, professional and business services employment declined between January and September. As Allison Shrivastava at Indeed warned:

• Data Blackout Creates Pricing Divergence: With BLS sidelined, near-term inflation pricing is distorted, with front-end breakevens and CPI swaps sending conflicting signals under differing fallback rules — reducing the reliability of market-implied inflation as a macro guide.

Federal Reserve Policy

• Powell Delivers Hawkish Surprise: The Fed cut rates 25 bps to 3.75-4% as expected, but Powell’s blunt warning that December is “far from” a foregone conclusion jolted markets. The vote saw rare dissents in both directions - Stephen Miran pushed for 50bp while Jeff Schmid wanted no cut - signaling a fractured committee with “strongly differing views.”
• Regional Fed Presidents Push Back: Three Fed presidents publicly opposed this week’s cut. Dallas’s Lorie Logan said she would find it “difficult” to support December easing without labor market deterioration. Cleveland’s Beth Hammack warned:

• Miran Champions Aggressive Easing: Fed Governor Stephen Miran, still technically on leave from the CEA, argued the neutral rate has fallen to ~2.5% and warned of recession risk if policy stays restrictive:

• December Odds Plummet: Markets now imply ~65% odds for a December cut (vs. ~90% pre-meeting) amid the data blackout.

Treasury Yields & Bond Markets

• Yields Rise Despite Rate Cut: The 10-year Treasury jumped 10 bps on Wednesday to 4.08%, posting one of the biggest Fed-day spikes since 2022 – also ending the week at the same level. The move reflects growing skepticism about the pace of easing and persistent concerns about fiscal sustainability, as debt has passed $38 trillion.
• Fed to End QT and Resume Buying: The Fed announced that QT will end by year-end, with expectations of $35 billion in monthly Treasury purchases starting in Q1 2026. Evercore ISI expects the Fed to start buying “most likely January and at the latest in March,” providing crucial support for the massive Treasury financing needs.
• Corporate AI Spending Floods Bond Market: Tech giants have issued over $200 billion in bonds for AI infrastructure this year. Meta’s $30 billion offering this week drew a record $125 billion in orders. Goldman Sachs warns AI-related issuance now accounts for over 25% of net corporate debt supply. As Gil Luria at DA Davidson cautioned:

• Bill Gross Turns Bearish: The bond veteran is selling 10-year Treasury futures, citing “too much supply even if economy slows to 1% to 2%.” The fiscal backdrop remains daunting, with deficits headed toward $2 trillion annually.

Market Dynamics

• Tech Rally Powers Through Volatility: The S&P 500 notched its sixth consecutive monthly gain (+16% YTD) while the Nasdaq achieved its longest winning streak in eight years. Amazon surged to record highs on robust cloud growth, though concentration risk intensifies with the Magnificent Seven now representing 38% of the S&P 500 market cap.
• AI Investment Boom Continues: Companies explicitly tie spending to AI capabilities. Nvidia became the world’s first $5 trillion company. However, divergence emerges: Meta’s accelerating spending warning triggered an 8% drop, while Amazon’s AI revenue beat drove a 10% surge.
• Bubble Concerns Mount: Michael Burry cryptically warned retail investors about market exuberance. The S&P 500 trades at 23x forward earnings, well above two-decade averages. As Ed Smith at Rathbones noted about potential correction:

Implications for the CRE Finance Market

• Credit Allocation Crowd-Out: The flood of high-grade tech issuance may divert investor demand from CMBS, potentially widening spreads for new deals as traditional buyers chase AI-related corporate bonds.
• Office Demand Faces Dual Pressure: White-collar layoffs create immediate absorption headwinds for office properties, while data centers emerge as the sole bright spot - though power constraints and massive capital requirements raise execution risks.
• Private Credit Interconnections Deepen: Growing non-bank financing across both AI infrastructure and CRE creates dangerous spillover potential. A risk-off turn could trigger broad repricing as shared investor bases and warehouse facilities transmit stress across sectors.

You can download CREFC’s one-page MarketMetrics, which includes statistics covering the economy and the CRE debt capital markets, here.

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Small Business Lending Data Rule Teed Up for Re-proposal

November 4, 2025

The Consumer Financial Protection Bureau’s (CFPB) final rule on small business finance reporting (aka Section 1071) will soon get a reproposal. 

Why it matters: The 1071 reporting requirements are intended to collect data on loan applications and originations made to small businesses. The CFPB did not exempt CRE mortgages from the final rule originally issued in 2023. 

• The CFPB is expected to propose a new rule more closely adhering to the Dodd Frank statute. The proposal is expected imminently. 
• The data collection rule, which includes commercial mortgages made to small businesses with under $5 million in revenue, has been delayed by litigation and administrative action. In June 2025, the CFPB extended the compliance deadline by one year. 
• CREFC advocated with other trades to exempt CRE and multifamily from 1071 reporting. Click here for the joint trade letter and click here for CREFC’s high-level letter.
• The original final rule largely exempts multifamily loans, which are reported separately under the Home Mortgage Disclosure Act (HMDA), but does not exempt loans secured by commercial real estate made to a small business.

Go deeper: The re-proposal could provide relief or limit the impact to CREFC members.

• The small business threshold is generally a business with under $5 million in gross annual revenue.
• Affiliate revenue counts in determining if the borrower is a small business. So if the legal borrower is a special purpose entity, the sponsor’s or affiliate’s revenue can exclude a loan as being to a small business.
• A lender must make 100 loans to small businesses in each of the preceding two years to be required to report. For CREFC members, that means 100 loans made to borrowers with under $5 million in gross annual revenue (including affiliates). But the threshold is institution-wide, not limited to a particular business line.
• Multifamily loans are excluded from 1071 reporting since they are accounted for already in the Home Mortgage Disclosure Act (HMDA) reporting.

Yes, but: Financial institutions with a dedicated small business lending platform will likely continue to be included. 

• Without criteria to exclude CRE mortgages, the loans to small businesses will have to be collected and reported, even if that business line doesn’t make 100 CRE loans. That collection and reporting could add burdens to CRE business lines.
• CREFC will analyze any final rule and coordinate with members on a response.

Please contact David McCarthy (dmccarthy@crefc.org) with questions. 

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NCREIF and CREFC Release 2Q 2025 Open-end Debt Fund Aggregate Report

October 30, 2025

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CRE Securitized Debt Update

October 28, 2025

Private-Label CMBS and CRE CLOs

Five transactions totaling $4.8 billion priced last week:

1. DBC 2025-DBC, a $1.1 billion SASB backed by a floating-rate, five-year loan (at full extension) for a Related Cos. partnership to refinance 1.1 million square feet of office space within the Deutsche Bank Center at 10 and 60 Columbus Circle in Midtown Manhattan.
   
2. LNCR 2025-CRE9, a $1.1 billion CRE CLO sponsored by LoanCore. The managed transaction comprises 11 whole loans and 11 loan participations secured by 26 properties. The pool’s top three property types are multifamily (56.1%), industrial (17.4%), and office (11.2%).
   
3. TRTX 2025-FL7, a $1.1 billion CRE CLO sponsored by TPG. The managed transaction comprises 21 loans secured by 45 properties. The pool’s top three property types are multifamily (61.4%), industrial (23.1%), and self-storage (6.1%).
   
4. NYC 2025-28L, a $900 million SASB backed by a fixed-rate, three-year loan for Fosun International to refinance a 2.1 million square foot office tower at 28 Liberty Street in Manhattan’s Financial District.
   
5. CSTL 2025-GATE2, a $550 million SASB backed by a fixed-rate, five-year loan for West Shore on eight apartment complexes totaling 3,241 units in six states. The mortgage and a $50 million mezzanine loan make up a $600 million interest-only debt package that is funding the acquisition of three properties and refinancing the other five.

By the numbers: Year-to-date private-label CMBS and CRE CLO issuance totaled $127.5 billion, representing a 39% increase from the $91.7 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 $3.7 billion last week, comprising $1.6 billion of Fannie DUS, $1.6 billion of Freddie K and Multi-PC transactions, and $478.8 million of Ginnie transactions.
• Agency issuance for the year totaled $119.7 billion, 36% higher than the $87.8 billion for the same period last year.

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

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New Bank Capital Proposal Expected in the Coming Months

October 28, 2025

According to an October 22 Bloomberg article, the Federal Reserve has shared with other regulators an outline of a revised bank capital proposal, which would significantly reduce bank capital requirements originally proposed under the Biden administration.

The new proposal, which represents the Fed’s latest attempt to implement Basel updates in the U.S., would result in a 3% - 7% increase in capital requirements for most big banks.

• This estimate is considerably lower than the 19% increase in the 2023 proposal. (A reproposal last fall would have likely reduced the capital increase to 9%.)

Go deeper: The regulators are weighing an opt-out for mid-sized banks if they adhere to certain requirements. 

• Banks are also urging the elimination of the dual capital calculation from the Biden-era proposal, where the higher of the standardized and advanced approaches would have to be applied.

What’s next: The article states that the Federal Reserve, the Office of the Comptroller of the Currency (OCC), and the Federal Deposit Insurance Corporation (FDIC) are in general agreement regarding the contours of the proposal. 

• Fed Vice-Chair of Supervision Michelle Bowman has indicated the proposal’s release in Q4’25 or Q1’26.
• CREFC will monitor developments closely and provide comments on elements of the proposal that have CRE implications.

In other capital-related news, the Fed released on Friday the models and methodologies behind the bank stress tests. 

• The Fed will now seek public comment on these scenarios each year before finalizing them. As reported by Politico, this move marked “some of the most drastic changes to the annual exercises since the 2008 financial crisis.”
• Fed Governor Michael Barr, the previous Vice-Chair of Supervision, dissented, stating that these process changes would make the stress tests “weaker and less credible.”

Please contact Sairah Burki (sburki@crefc.org) with questions.

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