- CRE CLO issuance is expected to grow 274% year-over-year, reaching $32.5B in 2025.
- CMBS conduit issuance will increase by 6.4%, hitting $35B, while SBLL volumes are projected to rise 28%, to $90B.
- Freddie Mac and Fannie Mae lending are each expected to grow to $65B, up nearly 19% from 2024.
- Agency loans remain the most affordable, with rates averaging around 5.7%.
CRE Lending Rebounds Sharply
CRE lending is picking up in 2025 as commercial real estate debt markets gain momentum, per GlobeSt. After a slow 2024, debt issuance across key products has climbed in the first half of the year. CRED iQ reports that CMBS, CLOs, and agency lending are all on pace to exceed last year’s levels.
CLOs Lead with Explosive Growth
CRE CLOs have posted the strongest growth. Issuance hit $17.3B through midyear and is projected to reach $32.5B by year-end. That figure nearly quadruples 2024’s $8.7B total, marking a 274% increase.
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CMBS and SBLL Volume Rebound
CMBS conduit issuance is growing modestly. After totaling $32.9B in 2024, volume is on track to reach $35B in 2025, a 6.4% increase.
Large single-borrower loans are rebounding faster. Issuance should climb from $70.5B last year to $90B, up nearly 28%.
Agencies See Strong Demand
Agency-driven CRE lending from Freddie Mac and Fannie Mae is also gaining momentum. Freddie Mac lending will likely rise from $56.2B in 2024 to $65B in 2025. Fannie Mae is expected to show a similar increase, from $55B to $65B.
Rates Vary by Product
Activity is expected to ramp up by mid-2026. That’s when governors will define the new Lenders are quoting a wide range of interest rates.
- CMBS conduit loans: 6.63% average
- CRE CLOs: 7.62%
- SBLLs: 8.30%
- Freddie Mac: 5.71%
- Fannie Mae: 5.74%
Agency loans continue to offer the lowest cost of capital.
Signs of a Market Recovery
Several factors are fueling the lending rebound. In its Q2 report, MSCI cited signs of market stabilization and improving confidence.
Blackstone President Jonathan Gray noted that new construction is slowing, especially in multifamily. This slowdown is helping balance supply and demand. Gray also pointed to growing transaction volume in logistics and multifamily, calling them “early green shoots” of recovery.
With the Federal Reserve trimming interest rates, CRE debt markets appear set for a stronger second half of the year.
