The data is clear: Commercial real estate lending is back in 2025.
A new report from CBRE found that firm-originated CRE loan closings across the U.S. increased 112 percent year-over-year in the third quarter of 2025, and are now at levels that haven’t been seen since the pre-COVID go-go days of 2018.
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CBRE cited both a lower interest rate regime initiated by the Federal Reserve — which has finally provided some stability for borrowing costs and tightened credit spreads — and a renewed determination by buyers and sellers to bridge the bid/ask spread on deals after several years on the sidelines.
James Millon, president and co-head of capital markets for the U.S. and Canada for CBRE, said in a statement that the stabilized financing costs have also been helped by a Five-Year Treasury yield that has settled around 3.5 percent, as well as a pronounced shift by borrowers and lenders alike into floating-rate financings that become popular when interest rates are expected to fall.
He also emphasized that “high-conviction sectors” such as multifamily and industrial — the latter of which includes data centers — are generating most of the deal flow.
“Core capital is beginning to return selectively, shaping equity pricing in key markets and building momentum,” said Millon. “This dynamic is fueling transactions and unlocking new opportunities.”
The revitalized lending environment has been powered by a return of commercial banks into real estate capital stacks, as well as a revived commercial mortgage-backed securities (CMBS) market, one that large commercial banks often power.
Banks have increased their overall lending share from 18 percent of deal flow last year to 31 percent of total deal flow, as bank CRE origination volumes rose a staggering 167 percent year-over-year, according to CBRE.
CMBS — which was once left for dead as recently as two years ago — saw its lending volumes increase by a factor of five in the last year. Today those securitized originations now claim nearly a 20 percent lending share of U.S. deals, up from 5 percent last year.
Perhaps it’s no surprise that private credit is still fueling most commercial real estate lending.
Debt funds and mortgage real estate investment trusts, claimed a 37 percent share of the lending pie through the third quarter of 2025, with debt fund origination volumes increasing by 68 percent compared to the third quarter of 2025, according to CBRE.
As for the source of capital that has lost market share: That would be life insurance companies.
Life company non-agency loan volumes declined from 43 percent of U.S. originations last year to only 16 percent in the third quarter.
“Construction activity also remains robust, especially for build-to-core multifamily and large-scale data centers,” said Millon. “We expect current momentum to carry into 2026.”
Brian Pascus can be reached at bpascus@commercialobserver.com.