There’s improvement after a few down years of loan origination, and then there’s setting a nearly two-decade record.

That’s what’s expected to happen in the CMBS market this year.

CMBS issuance grew every quarter in 2024 and ended up 150% ahead of 2023. There were 15 single-borrower CMBS loans worth more than $1B issued in October alone, compared to four in all of 2023.

And 2025 is off to a roaring pace that may set a new post-Great Recession record. There were $8B of new issuances in January, and another $9B has already come to market in February. That’s nearly double the pace of the first two months of 2024.

“Buyers are still active, and they want to be in this market today,” said Aaron Jodka, director of research for U.S. capital markets at Colliers. “They see today as a very attractive acquisition time, and sellers have come around to the concept of higher-for-longer interest rates. They’re no longer waiting.” 

Get into the data and where that money is going: CMBS Issuance Headed For A Record Year After Skyrocketing In 2024

— Mark F. Bonner, Kayla Carmicheal, Catie Dixon and Jay Rickey

Not getting The First Draft in your inbox? Click here to sign up. Got any feedback or want to send us a mailbag letter? Email firstdraft@bisnow.com.

CRE News Quiz

Investment firm Georgia Capital and homebuilder Paran Homes own a 50% stake in a new venture spearheaded by JPMorgan. What is the JV focused on? (Bonus points if you also remember the JV’s name!)

(Answer at the bottom.)

On Our Radar

• DEVELOPING: Barings is acquiring Artemis Real Estate Partners. The deal, expected to close in Q1, will integrate Artemis, an $11B real estate investment firm, into Barings’ $50B global real estate platform while maintaining Artemis’ investment approach and leadership team. Financial terms weren't disclosed. Artemis has been an active player despite the pandemic-driven downturn with deployments of capital — including a $2.2B distress fund in 2023 — into distressed assets. Bisnow will have a story up soon.

• Net-lease investment surges 57% in Q4, driven by industrial. U.S. net-lease investment hit $13.7B last quarter, up 57% YOY, pushing the full-year volume to $43.7B (up 13%), according to CBRE. Industrial assets led the charge, accounting for 64% of Q4 activity, an 87% spike over 2023. REIT investment soared 180% YOY, while cross-border investment nearly tripled to $5.1B. Cap rates rose to 6.8% across property types, with retail seeing the biggest increase.

• Housing market thaw? Mortgage rates are still a big hurdle. Agents are hopeful for a homebuyer rebound this spring after two slow years, with sales projected to rise between 2.3% and 12%. However, mortgage rates, averaging just under 7%, are a problem. Some buyers are adjusting, but rate volatility — driven by inflation and economic shifts — could delay the recovery. Agents say the next six to eight weeks will be crucial in determining if buyers will take the leap anyway.

• Meanwhile, homebuilder confidence is dropping. The NAHB/Wells Fargo Housing Market Index fell to 42 this month, five points below January and an indication of general pessimism about the near-term outlook for housing. The weakest point: Traffic of prospective buyers fell to 29. Sales expectations for the next six months plunged 13 points. Meanwhile, Texas' BTR sector, the biggest in the U.S., is slowing. Nationally, BTR starts dropped over 50% in 2024.

• Hey, we really need your help. We're working hard to make The First Draft even sharper, smarter and more valuable for you — and we want your input! Got 60 seconds? That’s all it takes to complete this quick survey and help refine your daily CRE news routine. Your feedback matters to us, and we truly appreciate your time.

On The Charts: What Are Retailers Up To?

Today’s insight is from BDO’s Retail CFO Outlook Survey, which polled 100 retail CFOs whose revenue tops $350M. It found 77% of retailers expect to grow their revenue this year, though it said “expectations around profitability improvements are muted.” BDO is forecasting an overall decrease in retailers’ footprints this year.

This Morning’s News

PEOPLE — 4 NYC Deputy Mayors Resign Over Adams-Trump Cooperation (Bisnow): NYC’s real estate chief was among the resignations over the DOJ dropping felony charges against Mayor Eric Adams to facilitate his cooperation with Trump's immigration policies. City Comptroller Brad Lander and New York Gov. Kathy Hochul have threatened to remove Adams. Read more here.

INVESTMENT — Blackstone Mortgage Targets Retail Investments (Bisnow): Low-risk retail is the name of the game for Blackstone’s investment strategy. The lender is targeting net-lease assets and is looking to expand lending outside of the U.S. Read more here.

CONVERSIONS — Cities Turn Old Hospitals Into Housing (WSJ): Hospitals offer notable features for residential conversions that office buildings do not, like tall ceilings, broad hallways and plenty of natural light. There are also over 700 hospitals at risk of closing. Read more here.

INVESTMENT — AREP Raises $309M, Shifts Focus (AREP): AREP says Fund IV will capitalize on opportunities in data centers and residential real estate. 80% of Fund IV is allocated to expanding AREP’s data center platform, PowerHouse. Read more here.

HOTELS — Investors Remain Checked In To Hotels (Bisnow): The hotel sector is set to receive even more capital this year due to expected high returns, low supply driving up values in key cities and a resurgence of business travel due to RTO mandates. 94% of hotel investors plan to maintain or increase their holdings, CBRE found. Read more here.

LEGAL — Equinix Execs Sued Over Fraud Claims (Bloomberg): A shareholder lawsuit accuses Equinix leaders of misclassifying recurring expenditures, misleading shareholders on a key metric of the REIT’s value. Read more here.

LEGAL — Shareholders Sue Cannabis REIT Over Looming Rent Defaults (Bisnow): Innovative Industrial Properties’ shareholders allege the company did not properly address the risk posed by unpaid rent or properly disclose tenant rent payment issues to investors. Read more here.

OFFICE — Tech Startup Joins RTO Bandwagon With A Twist: $10K Raises (Bisnow): Once a vocal supporter of remote work, the tech startup is offering workers a host of incentives to come back to its Chicago office four days a week, including paying for lunches, parking and gym memberships. Read more here.

HEALTHCARE — KKR Has A Month To Decide On £1.6B Takeover Bid (Bisnow): The private equity firm made a nonbinding proposal to buy healthcare real estate investor Assura at a value of £1.6B — 28% above the company’s share price but 3% below the net asset value of its properties. The company rejected the offer, KKR’s fourth. KKR has until March 14 to decide if it wants to continue with a formal bid. Read more here.

INFRASTRUCTURE — KKR Partners With Energy Firm EGC (KKR): With KKR as a strategic partner, EGC aims to accelerate its growth and become the leading decarbonization partner for the real estate industry. Read more here.

DATA CENTERS — Tech Starts To Meet AI (CO): Data centers — even those far from population hubs – could likely soon be operated almost entirely remotely. Read more here.

FINANCE — Nada Launches U.S. Home Equity Fund (Homeshares): Nada’s home equity agreement gives homeowners an upfront lump-sum payment in exchange for a share of their home’s future value. For investors, HEAs provide exposure to residential real estate appreciation without the burdens of property ownership. Read more here.

SENIOR HOUSING — Solinity Expands Leadership (Solinity): Senior housing developer Solinity has named William Holly and John Moore as partners to spearhead the growth of its $300M development and acquisition pipeline in the southeastern United States. Read more here.

LEGAL — Alexander Brothers Face Additional Sexual Assault Lawsuits (NYT): Real estate brokers Tal and Oren Alexander now face at least 17 lawsuits from women who say they were sexually assaulted and in some instances drugged. Read more here.

M&A — Resurgent Realty Trust Moves To Acquire Generation Income Properties (Investing.com): Resurgent Realty Trust has offered to buy a controlling stake in Generation Income Properties. GIPR has a market capitalization of $9.3M. Read more here.

LEGAL — Lawsuit Filed To Stop $1B Television City Expansion (Bisnow): Rick Caruso, owner of The Grove Mall and former mayoral candidate, filed suit against LA and the developer of studio lot Television City’s makeover. The suit alleges the project’s scope and impact are undefined and pose a risk to the community and environment. Read more here.

CONSTRUCTION — Argo Launches Green Concrete Division (Argo): Construction materials firm Argo is establishing a green concrete division in the U.S. The subsidiary will develop and commercialize environmentally friendly concrete solutions that incorporate bio-graphene, a sustainable alternative to traditional graphene. Read more here.

RESIDENTIAL — Tech Execs Snapping Up Buildings With Phone-Free Zones (New York Post): Tech executives are fueling demand for Miami properties banning smartphones for distraction-free living. One development is Perigon on Miami Beach, where units start at $5.5M. Phones won't be allowed in the restaurant, pool or cabanas. Read more here.

***

So You’ve Come For An Answer

Build-to-rent homes.

The trio has started up Laseter Development Group, which will be a vertically integrated BTR development operation with a focus on Southeast new builds. JPMorgan’s asset management arm is focused on developing in the sector, its head of real estate said.

Do you think you have a harder CRE news question? Email us. Take your best shot and we may feature you and your question in this space.

***

The First Draft is produced by Director of Newsletters Jay Rickey, Managing Editor Catie Dixon, Editor-in-Chief Mark F. Bonner and Deputy Newsletter Editor Kayla Carmicheal, with an assist from AI. We’d love your feedback! Email us at firstdraft@bisnow.com.