Looking ahead to 2025, we believe CMBS is set for a record year with issuance and special servicing volume expected to reach peak levels not seen since the global financial crisis (GFC). In our view, the commercial real estate (CRE) securitization issuance momentum that began in 2024 will carry over into the new year as borrowers need to refinance maturities and are accepting of current rates and property valuations—the latter of which is exhibiting signs of stabilization. These factors, along with the potential economic benefits of reduced regulation with the incoming administration, will lay the groundwork for increased private label activity. We forecast 2025 CMBS (conduit and single borrower) issuance to reach levels not seen since the GFC, while CRE collateralized loan obligations (CLO) will stage a strong comeback as bridge lending spigots widen.
However, while we expect strong issuance growth in 2025, there will continue to be credit challenges on outstanding CMBS. The…