The State of Commercial Real Estate Lending in 2025: Key Trends, Emerging Players, and the Role of Private Capital

Interest Rates and Structuring Challenges 

According to Acuity Knowledge Partners, although the Federal Reserve introduced modest rate cuts in late 2024, the effects have been limited. Long-term rates remain elevated, with the 10-year Treasury hovering near 4%. That has placed upward pressure on debt service costs and made traditional senior loan structures harder to underwrite. According to GoDocs, average DSCR loans have dipped from 8.73% in early 2024 to around 7.76% by Q1 2025, tightening lender requirements and shrinking the pool of viable deals. 

Developers are responding with more creative capital stacks—combining senior loans with mezzanine debt, preferred equity, and bridge loans to get deals across the finish line. These structures are especially useful for transitional assets or projects in lease-up, where traditional financing is hard to secure. 

Private Lenders Step Into the Gap 

As banks pull back from CRE lending—particularly in office, retail, and non-stabilized properties—private lenders are seizing the opportunity. A March 2025 report by PCBB found that non-bank lenders originated $4.43 billion in short-term CRE loans in just the first few weeks of the year, reflecting borrowers’ growing shift toward private capital sources (PCBB, 2025). 

At HALL Structured Finance, we’re a trusted source for hotel, multifamily, and mixed-use financing—valued for our speed, certainty, and borrower-first approach. We’ve recently provided a $36.21 million first-lien construction loan to Lēva Living, a Houston-based residential development firm for Humble Ranch, a 160-unit build-to-rent community in Atascocita, Texas, just 25 miles from downtown Houston. The project will help meet the growing housing demand driven by the region’s rapid population growth and ongoing housing supply shortages. Jennifer Orr, President and Co-Founder of Lēva Living, stated, “The HALL team’s meticulous attention to detail and unwavering commitment to excellence ensured that no stone was left unturned. They made the entire closing process remarkably smooth and stress-free for us through their consistent communication, professionalism, and dedication every step of the way.” 

Sector Focus: Multifamily, Hospitality, and Select Office 

In terms of asset class performance, multifamily and hospitality remain top choices for lenders. Demand for rentals in high-growth metros continues to rise, and hospitality has rebounded on the back of travel recovery and lifestyle demand. Business Insider reports that capital is actively flowing to these sectors as they offer more predictable performance and favorable fundamentals in 2025. 

Office, on the other hand, remains segmented. According to Acuity Knowledge Partners, national office loan delinquencies hit 9.37% by late 2024. However, not all offices are distressed—Class A, ESG-certified buildings in core locations are still attracting lender interest. Projects that offer flexible layouts, premium amenities, and high walkability scores remain financeable, especially when paired with experienced sponsors. 

Final Thoughts 

The CRE lending environment in 2025 demands adaptability. While interest rates remain a constraint, opportunities exist for sponsors who embrace creative deal structures and partner with agile, non-bank lenders. We at HALL Structured Finance represent the new standard—fast, flexible, and borrower-focused—with the expertise to guide developers through complex projects.