CRE Borrowing Costs Drop as Debt Markets Loosen

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Good morning. CRE borrowing costs are trending down as banks return to the market and private lenders inject fresh capital, creating a more competitive and liquid debt landscape.

Today’s issue is brought to you by Vintage Capital—offering recession-resistant assets and powerful 2025 tax benefits.

We’re tracking whether CRE investors are leaning in or pulling back—across multifamily, industrial, retail, and office. Take the Q4 Fear & Greed Survey.

Market Snapshot

Debt Dynamics

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• Market insights: In a new article, Hines’ Global Head of Client Partnerships explains how successful occupiers are choosing integration over fragmentation to achieve global scale, efficiency, and long-term value. (sponsored)

• Trump effect: Trump’s second term has delivered tax breaks and pro-development policies for CRE, but tariffs and unpredictability cloud the gains.

• Split signals: Fed officials are increasingly divided over whether to cut rates in December, with hawks citing sticky inflation and doves pointing to a weakening labor market 

• Dual pitch: Blackstone is courting both 1031 exchangers and big-ticket investors with tax-advantaged DSTs and low-fee share classes to revive fundraising for its $100B nontraded REIT.

• Job disruption: Starwood’s Barry Sternlicht warns AI will cut jobs as CRE shifts toward data centers and tech-driven efficiency.

• Tokio takeover: Japanese insurer Tokio Marine is acquiring a majority stake in $18B U.S. lender Acore Capital. 

• Broker backlash: One year later, NYC’s FARE Act shifted broker fees to landlords, shrinking listings, squeezing agents, and fueling a legal fight. 

• Home slicing: Real estate startup Arrived has raised $27M from top tech execs to grow its single-family rental investment platform.

• Rent retreat: Multifamily rents dipped again in October as weak demand and economic uncertainty weigh on the sector. 

• Takeover talks: Apartment landlord Centerspace is weighing a potential sale as it fields takeover interest and explores strategic options with advisers. 

• Luxury deal: Ballast Investments and Carlyle Group snapped up a $31.9M Pacific Heights property as San Francisco’s rental market rebounds.

• Final chapter: Multifamily firm Aimco plans to liquidate its assets and shut down after a year-long strategic review, marking the end of an era for the former REIT.

• Spec space: Lincoln Property Company completed the first phase of a $80M industrial project in Tucson, with plans to expand to over 1M SF.

• Smart upgrade: WiredScore is now offering digital connectivity certifications for U.S. industrial properties to meet growing tenant tech demands. 

• Defense deal: Saronic Technologies signed a long-term lease for an 83,469 SF industrial R&D space in San Diego’s Sports Arena submarket. 

• Lunar lease: Astrolab has become the first tenant of Texas A&M’s $200M Space Institute near NASA’s Johnson Space Center.

• Simon says: Simon Property Group has rebounded post-pandemic, proving malls can still thrive in today’s retail landscape.

• Holiday surge: Fifth Avenue, Rodeo Drive, and the Magnificent Mile are set for a strong holiday season, with diverse shoppers driving traffic and spending across top retail corridors. 

• Fast food: Quick-service restaurants are flooding top retail spaces despite tighter margins, rising rents, and consumer belt-tightening. 

• Mall makeover: WS Development is transforming Santa Rosa’s historic Montgomery Village mall into a modern, community-focused retail hub.

• Conversion crunch: Office-to-residential conversions in Lower Manhattan are driving a surge in leasing, as displaced tenants stay local and upgrade to higher-quality spaces.

• Amazon axes: Amazon will cut 660 jobs across several Manhattan offices in January, hitting 424 Fifth Ave. and 5 Manhattan West hardest.

• MOB slowdown: Healthcare real estate sales cooled significantly over the past year, with medical office buildings and hospitals trading well below historical averages. 

• Texas trend: Coinbase is relocating its corporate registration from Delaware to Texas, following in the footsteps of Elon Musk’s high-profile move. 

• Strategic shrink: BNY Mellon is cutting its Philadelphia office footprint by two-thirds, exiting its longtime namesake tower for a much smaller lease. 

• Houston rebound: Owner-user deals are helping Houston’s office market stabilize, with over 2M SF pulled off the market this year.

• Harvard hub: Harvard’s new mass timber convention center, the Rubenstein Treehouse, anchors its Enterprise Research Campus and aims to foster collaboration between academia and industry.

• Value vacations: Family travel demand is strong heading into 2026, but parents are closely watching their budgets and want hotels to improve affordability and inclusivity. 

• Resort revamp: An investor group has acquired the Sawgrass Marriott Golf Resort & Spa for $149M, with plans to renovate the 66-acre Florida property adjacent to TPC Sawgrass.

📈 CHART OF THE DAY