Hey there!
Last night, I rubbed elbows with the banking crowd at an event hosted by a Big 5 commercial bank.
The economist’s talk was all about immigration and tariffs (more on that another time!).
But the real buzz was in the side conversations.
With a room full of bankers, everyone wanted to know: is the bank “open for business” for commercial real estate lending? 🤔
Coincidentally, I had just finished poring over CBRE’s 2025 Canadian Real Estate Lenders’ Report. 📊
Thrilling stuff, right? 😉 But get this – the bankers’ chatter was spot-on with the report’s findings! 🎯
The survey, which taps into the minds of lenders holding over $200B in real estate loans, reveals a lending landscape that’s eager to roll, but not without some curveballs.
Here’s the tea: ☕
🔹 Lenders are all systems go: 76% are gearing up to do more deals in 2025, with nearly 1/4 eyeing a staggering 20%+ volume boost. It’s no holds barred too, with 70% ready to elbow each other out for prime deals – the fiercest competition in 3 years! This aligns with the pent-up demand we’re hearing about from borrowers. 💪
🔹 Optimism reigns (mostly): Lenders are giving the 👍 to almost every asset class vs. last year. The shocker? Downtown Class A offices had the biggest sentiment upswing. Perhaps the “office is dead” narrative was overblown! 🏢
🔹 Condo cooldown: High-rise condos and land saw startling jumps in lender unease this year. Is the condo craze losing steam? Lenders seem to think so. Rising costs and spiking inventory will likely keep them cautious.
🔹 Lenders play hardball: When asked about loan spreads, lenders quoted 35 bps higher on average than actual deal levels. Looks like they’re channeling their inner poker champ at the negotiating table! 🃏 This gap hints at room for savvy borrowers to push for better terms.
The spread ranges lenders are throwing out are 🤯:
🔹 Underwriting uncertainty rules: Lenders’ top pain point? Pinning down property values and underwriting in a fast-shifting market. Throw in the timeless “buyer vs. seller” price war, and you’ve got a 🧩 on your hands. Nimble and creative approaches will be key to getting lenders comfortable.
🔹 Sustainability sidelined?: Remember all the hype about sustainability flipping lending on its head in a snap? Lenders are now saying “not so fast!” More are pushing out forecasts 5+ years for when a borrower’s carbon footprint will truly sway loan terms. That’s a 180 from the sustainability 🎉 of yesteryear! Still, the smart money is on future-proofing assets now.
The bottom line? 2025 is looking like a gold mine for savvy borrowers who can roll with the punches. 🥊 But to nab those opportunities, you’ll need a financing whiz in your corner to craft a winning strategy and woo lenders in this wild west market.
That’s where I come in! 🙋♂️ I’m your lending GPS – steering you clear of potholes, matching you with the ideal lender, and gift-wrapping your deal so lenders can’t say no. 🎁
So, if you’ve got a financing inkling (or even a glimmer of a thought💡), let’s talk! I’m always game to brainstorm creative ways to get your deal inked!
Let’s chat soon!
Cheers,
Vince
P.S. It’s not too late to register for tonight’s event! Join us to chat about all things CMHC Multi-Family financing. Register here
