Good Morning Everyone

Welcome to your weekly CRE market update. I’m breaking down the biggest deals and revealing the lending criteria and insights driving them. My goal today is to provide you with value from the information you will read, whether it’s a new lender to connect to, an idea/strategy to execute, or a location to look for more/better deals. Let me know if you have any lender-specific questions or requests.

🏢 Domestic & Global Deals
📈 Interest Rate Outlook
🚧 Addressing Challenges
⚖️ Regulatory Watch
🔮 Future Outlook
🏆 Winners & Losers
🔦 Deal Spotlights
👤 Lender Profiles
🤝 Location Opportunities
💡 Alpha Trends
📝 New Loan Programs


Let’s dive in.

Bridge Loan Guy
Top Loans of the Week

Largest US loan deal: Doral Renewables ($1.5 billion, Mammoth Solar project)

Largest Global loan deal: La Societe de projet BVH1’s $733 million construction loan from Desjardins Group (Admin Agent)

TOP CRE DEALS

Domestic Market
◾ KeyBanc, Santander, HSBC: $1.5B into Doral Renewables' massive Indiana sun farm – Link
◾ Institutional lenders: $1.4B on STACK Infrastructure's data center empire – Link
◾ JP Morgan, Citigroup, Morgan Stanley: $1.04B lifeline to RXR's office tower – Link
◾ Blackstone: $925M on King Street's Colovore expansion – Link
◾ Kennedy Wilson, Pearlmark: $195M to Republic Properties' apartment project – Link
◾ PCCP: $126M for Madison Capital's four-state warehouse portfolio – Link
◾ Virginia Housing, Freddie Mac, Sterling Bank: $120M for Fairstead's Alexandria redevelopment – Link
◾ BWE/Affinius Capital: $73.36M for Thrive Companies' Columbus apartments – Link
◾ Corebridge: $67.2M for Tishman Speyer's Nashville apartment grab – Link
◾ PCCP: $58M for Arton Holdings' Phoenix apartment project – Link

Global Market
◾ Desjardins Group Fuels $960M Wind Power Revolution for Boralex Consortium – Link
◾ NatWest & SMBC Power UK Energy Transition with £145M Battery Storage Deal – Link
◾ Nuveen Real Estate's €177M Green Loan Energizes UK's Largest Passivhaus Student Housing – Link
◾ BNP Paribas & Rabobank Supply €146.6M Green Financing for Zelestra's Spanish Solar Portfolio – Link

INTEREST RATE OUTLOOK

The Federal Reserve is maintaining its 4.25%-4.50% target rate with a "wait-and-see" approach amid inflation concerns. This environment pressures CRE valuations and transaction volumes, creating substantial refinancing risk for maturing loans. Lenders have tightened standards with lower LTVs, higher DSCRs, and increased spreads. Though potential rate cuts may begin in late 2025, CRE stakeholders must navigate near-term debt yields of 10.3% and cap rates of 6.1%.

ADDRESSING CHALLENGES

Chicago's industrial market recorded negative absorption (-1.2 million square feet) in Q1 2025, its first decline in eight years. Vacancy rates jumped 78 basis points to 9.44%, primarily from vacant second-generation space. This trend is concerning even for this typically resilient sector. Meanwhile, with nearly $1 trillion in CRE debt maturing in 2025, CMBS data shows over 75% of distressed loans already past maturity, with an increasing percentage shifting from performing to nonperforming status as borrowers face substantially higher refinancing costs.

REGULATORY WATCH

Basel III standards and the Climate Change Financial Risk Act of 2025 are reshaping CRE lending. Capital requirement changes could reduce banks' willingness to finance CRE projects, shifting activity to private lenders. Mandatory climate-related stress tests are forcing more careful evaluation of environmental risks. In Germany, energy efficiency regulations are creating a market bifurcation in data centers, with "green premium" assets commanding higher valuations while less efficient properties face a "brown discount" – exemplifying how climate considerations are affecting real estate finance globally.

FUTURE OUTLOOK

MetLife Investment Management suggests 2025 could begin a new CRE cycle, with undervalued assets presenting opportunities for well-capitalized investors. The "Great Re-Sort" continues as capital shifts between sectors based on structural demand changes. Data centers, cold storage, life sciences facilities, and medical offices remain bright spots, while retail and office spaces face pressure. Cushman & Wakefield forecasts vacancy rates rising to 6-6.5% by early 2026 before stabilizing. The "flight to quality" will widen performance gaps between prime and secondary assets, while Fed rate decisions and trade policies remain critical factors.

DEAL SPOTLIGHT

STACK Infrastructure $1.4B Green Financing Facility

◾ Loan Amount: $1.4 billion
◾ LTV: 55-60% (estimate based on typical stabilized data center financing)
◾ Interest Rate: SOFR + 1.4% to 1.8% (estimate based on green financing advantages in current market conditions)
◾ Loan Term: Likely 3-year initial term with two 1-year extension options (estimate based on similar institutional data center financing)
◾ Property Type: Portfolio of 10 fully stabilized, revenue-generating data centers across North America with estimated capacity exceeding 1GW
◾ Borrower Profile: Leading global data center developer/operator backed by IPI Partners (recently acquired by Blue Owl), having raised over $21 billion in capital since inception and operating across North America, EMEA, and APAC regions
◾ Unique Feature: Structured as green financing to support long-term ownership objectives, likely requiring compliance with specific sustainability criteria while preserving optionality across debt and equity pathways

LENDER PROFILES

Profile Type: Construction & Bridge Loan Specialist
Focus: Hotel and multifamily development; recent expansion into themed resorts
LTV Range: 65-75%
Interest Rate: 7.5-10% (based on 2025 commercial construction rates)
Geographic Scope: Nationwide across the U.S.
Deal Size: $35-60 million, typical range
Key Criteria: Non-recourse terms, entrepreneurial approach, flexible underwriting standards, creative loan structures, fast execution, focus on experienced developers and viable project economics
Key Differentiator: Their experience with hotel conversions and adaptive reuse positions them perfectly for the current wave of asset repurposing

Struggling with your deal?
⮞ Lenders: Tired of looking through 100 deals to fund one? Get introductions to qualified sponsors EMAIL
⮞ Brokers: Hate daisy chains? Get direct intros to well-capitalized lenders EMAIL

◾ Northern Virginia's data centers score highest for lenders and family offices due to strong fundamentals and credit-worthy hyperscaler tenants.
◾ Industrial/logistics dominates opportunities with Dallas and Atlanta leading, driven by e-commerce and supply chain restructuring.
◾ Orlando's multifamily market appeals to developers and long-term investors but shows less attraction for brokers due to lower transaction velocity.
◾ Raleigh-Durham's life sciences sector attracts family offices seeking long-term appreciation near major university research centers.
◾ Specialized broker expertise commands premium fees in Northern Virginia (data centers) and Raleigh-Durham (life sciences).
◾ Charlotte ranks high only for lenders, indicating strong debt metrics but less compelling equity returns in its multifamily sector.

⮞ Get our “blue-ocean” reports to help you uncover the best locations to close more deals EMAIL

💡ALPHA TRENDS

📝 NEW LOAN PROGRAMS

◾ Froda and wamo launch innovative card-based lending solution to bolster business financing options for small enterprises across Finland. Read
◾ Clean Energy Credit Union partners with Blu Opportunity to expand access to affordable solar financing for homeowners across underserved communities. Read

Lastly, no content provided by Bridge Loan Guy or Loans, Lenders & Leverage should be considered tax, investing, or financial advice. This email and any other content we provide are for entertainment and education purposes only. We do not claim to provide tax, investment, financial, or other legal advice. Any content provided by Bridge Loan Guy or Loans, Lenders & Leverage is the personal opinion of our owners and/or staff – you should always conduct your own research