Lending Momentum Jumps 45% YoY Despite Spring Slowdown

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Good morning. CRE lending powered ahead in Q2, climbing 45% year-over-year as debt funds, banks, and CMBS lenders ramped up activity. Easing credit terms and rising agency multifamily volumes point to a market regaining confidence.

Today’s issue is brought to you by InvestNext—learn how to capture your share of the $7 trillion retail capital opportunity.

We’re tracking whether CRE investors are leaning in or pulling back—across multifamily, industrial, retail, and office. Take the Q3 Fear & Greed Survey.

Market Snapshot

CAPITAL FLOW

TOGETHER WITH INVESTNEXT

Capturing Retail Capital in 2025

$7 trillion in retail capital is entering alternatives through 2032, and many of these investors are looking to invest in real estate.

Yet most mid-sized GPs are still focused on institutional fundraising.

Here's what the data shows:

• 70% of high-net-worth individuals would invest in alternatives if properly approached

• Retail investors represent only 16% of alternative AUM despite holding 50% of global investable assets

• Industry reports show mid-market funds demonstrating stronger momentum with retail investors than mega-funds

The firms that understand retail investor expectations and act accordingly will capture new capital sources while those that don’t will miss out on this massive opportunity to acquire new investors.

Download your copy of How to Capture Retail Investor Capital

*This is a paid advertisement. Please see the full disclosure at the bottom of the newsletter.

• Fueling wealth: Aspen Funds is filling the gap left by institutional investors in oil and gas—generating 15% cash-on-cash returns for retail investors through proven, producing energy assets. (sponsored)

• IPO watch: Trump is planning a late-2025 stock offering for Fannie and Freddie, aiming to raise $30B. 

• Servicing dip: After three months of increases, the US CMBS special servicing rate edged down to 10.48% in July, with office loans still leading distress. 

• Sports districts: Expiring stadium leases are fueling a wave of redevelopment proposals, as pro teams pressure cities for new venues tied to lucrative mixed-use projects. 

• Construction slump: US apartment construction has plunged to its lowest level since 2015, with just over 542,800 units underway in Q2. 

• Sector shakeup: Telecom REITs overtook residential as the top allocation in actively managed real estate funds for the first time since 2017.

• Bid battle: UK healthcare real estate firm Assura is sticking with Primary Health Properties’ $2.4B takeover offer, rejecting a renewed push from KKR.

• Secondary wave: The real estate secondary market is set for a record $210B in 2025 as liquidity demand and GP-led deals soar. 

• Returning optimism: CBRE sees 2025 CRE investment up 10% as tax breaks and investor activity offset uncertainty.

• Rent plateau: US apartment rents held flat at $1,717 in July, marking six straight months of stagnation as Midwest and Northeast markets outperform supply-heavy Sun Belt metros.

• Digital nomads: St. Louis, Pittsburgh, and Austin lead 2025’s best cities for digital nomads, combining lifestyle, connectivity, and affordability. 

• LIHTC boost: New tax law changes and higher Fannie/Freddie investment caps could finance 1.2M more affordable homes in the next decade. 

• Rent trap: New York landlords eye demolition or major rehab as rare paths out of rent stabilization, but a recent court ruling shows how tough state approval can be. 

• Waterfront refi: Acre secured a $72M loan from Nuveen to refinance its 236-unit Adela at MiMo Bay in Miami.

• Industrial debut: Ex-Crow Holdings and CBRE execs launched Eider Creek, starting with two Texas logistics projects. 

• Renewal rush: Major renewals from government and corporate tenants fueled a 178% jump in industrial leasing across NYC’s outer boroughs in Q2.

• Power surge: Explosive data center growth on the PJM Interconnection grid is set to drive electricity bills up as much as 60% by 2030.

• Zoning reversal: A judge tossed approval for the 2,100-acre Prince William Digital Gateway over public notice violations, stalling plans for the world’s largest data center hub.

• Rodeo record: A Tom Ford–anchored Rodeo Drive property sold for over $400M, marking one of Beverly Hills’ priciest deals ever and potentially a single-property record for the famed retail strip. 

• Youth appeal: Bath & Body Works is entering 600 college stores to court Gen Z with its top fragrances.

• Office divide: While SF’s office recovery has leveled off, LA continues to slip, except for Century City’s amenity-rich, high-income hub.

• Funding freeze: The federal government’s $500M pullback from mRNA vaccine research threatens smaller biotech firms and could slow lab leasing in an already struggling life sciences market. 

• Global trends: Global prime office costs rose in Q2, led by North America, where Miami posted the sharpest US increase amid sustained demand for Class A space.

• Hotel housing: NYC developers are turning shuttered migrant hotels into over 1,100 apartments, with more projects planned to address the city’s housing shortage.

📈 CHART OF THE DAY