*
*Lending Rebounds Sharply as Rates Stabilize and Spreads Tighten**

    Commercial real‑estate borrowing surged in Q3 2025 as easing rates and narrowing spreads closed the pricing gap that had stalled investment for two years. CBRE’s Lending Momentum Index, which tracks loan closings, leapt 112 % year‑over‑year to 1.04—its highest level since 2018—driven largely by a 36 % jump in permanent financing, with September posting some of the strongest origination volumes in years.

    Borrowing costs remain below their cycle peaks. Average spreads on 7‑ to 10‑year fixed‑rate loans widened modestly to 197 bps, up 4 bps from Q2 and 14 bps from a year earlier. Multifamily spreads tightened 27 bps year‑over‑year to 141 bps amid fierce competition among agency lenders. These figures are based on loans with 55 %–65 % LTV.

    James Millon, CBRE’s U.S. and Canada Capital Markets president, said the market is seeing a broad recovery across major asset classes, led by multifamily and industrial. “Core capital is returning selectively, shaping equity pricing in key markets and building real momentum,” he noted. He added that stabilizing financing costs—five‑year Treasuries hovering in the mid‑3 % range—combined with tightening spreads and a shift to floating‑rate structures is narrowing the bid‑ask gap and unlocking transactions.

    Office financing and sales volumes have “surged by multiples, not percentages,” as investors focus on the strongest buildings in the fastest‑growing markets. Construction lending remains active, especially for build‑to‑core multifamily and hyperscale data‑center projects, with expectations of continued improvement into 2026.

    Alternative lenders dominated CBRE’s non‑agency loan closings in Q3, capturing 37 % of volume (up from 34 % a year ago). Debt funds drove a 68 % year‑over‑year rise in originations. Banks reclaimed significant ground, raising their share to 31 % from 18 % and boosting volume by 167 %. CMBS lenders grew to 17 % from 5 %, with securitized issuance more than quintupled. Life insurers fell sharply to 16 % from 43 %.

    Credit conditions are easing: loan constants fell 20 bps from Q2, average mortgage rates dropped 28 bps, and lenders accepted slightly higher risk, with average LTV rising to 63.8 % from 63.3 %. Agency multifamily originations hit $44.3 B—a 53 % Q2 increase and 57 % year‑over‑year. CBRE’s Agency Pricing Index for 7‑ to 10‑year permanent loans fell to 5.6 %, down 13 bps quarter‑over‑quarter and 27 bps year‑over‑year.