Big Banks ‘Back in Action’ on Commercial Real Estate Financing: MIPIM Panelists
Even office isn’t quite the swear word it was a year ago
By Nicholas Rizzi March 12, 2025 2:28 pm
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After a few tough post-pandemic years for real estate, the capital markets in the U.S. “are open” as banks have more liquidity to lend again, according to panelists at the MIPIM global real estate convention in Cannes, France.
Issuance for commercial mortgage-backed securities, for example, exploded last year, increasing 150 percent over 2023, Bisnow reported. And the year kicked off on a high note with $8 billion issued in January and another $9 billion in February, both increases from the same months last year.
“It does feel like there’s a real opportunity to finance commercial real estate efficiently for the first time in awhile,” Michael Lascher, a senior managing director and global head of real estate debt capital markets for Blackstone (BX), said Wednesday during MIPIM’s “Trends in U.S. Real Estate and Capital Markets” panel.
“The markets are open, so from our perspective, when you see a door, you need to walk through it,” Lascher added. “So we’re taking the opportunity to get ahead of some of our maturities coming up in `26 and `27.”
Aside from the CMBS market roaring back to life, “the banks are back in action,” Lascher said, with more liquidity to lend again.
“A lot of banks spent that time trying to get comfortable with our portfolio, trying to work on restructurings and amendments to loans that they have in their books,” said Kwasi Benneh, Morgan Stanley (MS)’s head of commercial real estate lending in North America. “I think that took a better part of two years, so I think as we look forward to this year, it was really sort of the all-clear signal for banks to go out there and lend again.”
The increased liquidity from banks should make the so-called maturity wall — the roughly $2 trillion of CRE maturities expected to hit between 2024 and 2026 — easier to weather as banks will be willing to lend on refinancings in the future.
“That’s an opportunity for all of us on the financing side — that’s more refinancings that we can do,” David Bouton, managing director and co-head of CMBS and real estate finance for Citigroup (C) in North America, said. “There’s a lot of liquidity to help support refinancing those maturities.
“So far we’ve seen the maturities being absorbed pretty nicely through the year,” he added. “Banks are very liquid on their balance sheet, which will help.”
And what a difference a year made for the industry. Last year, panelists on the same topic said office was considered a “four-letter word” as it faced challenges. But that has turned around as leasing in markets like Manhattan improved last year and had a strong start to 2025.
“We all probably had known for a while that office isn’t dead, and it was never going to be dead,” Lascher said. “We’re seeing that, whether the CMBS market or bank balance sheets, for the right office assets, there is a ton of liquidity in the market, which is just a very different story.”
Lascher added that Manhattan has been the most “resilient” office market, so that has led Blackstone to return to the asset class for the first time in almost three years, with the private equity company under contract to buy a 49 percent stake in 1345 Avenue of the Americas from Fisher Brothers. It’s unclear how much Blackstone is looking to pay for the stake, but Reuters reported it’s seeking an $800 million acquisition loan for it.
“[It’s a] really high-quality office building, a great partner, and really a testament to the strength of the New York City office market,” Lascher said.
However, the activity for office has mainly been focused on high-quality Class A buildings attracting top tenants — 1345 Avenue of the Americas secured the largest U.S. office lease of 2023 with Paul, Weiss, Rifkind, Wharton & Garrison taking 765,000 square feet — but that will slowly change as more companies down the line call workers back to the office.
“As we continue to go through the return-to-office phenomenon that we’ve seen over the last 12 months, at some point even the smaller companies are going to ask people to come back to the office,” Benneh said. “And that is when you’re going to start seeing some of these weaker asset classes start to get financing.
“It’s going to take a while, but it’s starting at the right place,” he said. “I think the next stage will be Class B offices that are currently hard to finance in the market.”
And any Europeans hoping to get an American perspective on how tariffs and a potential trade war with President Donald Trump will impact the CRE industry were out of luck with this collection of heavy banking hitters. The panelists dodged the question during the Q&A session at the end.
“It’s creating some uncertainty right now, but I don’t think we’re prepared to get into a tariff discussion,” moderator David Forti, co-chair and partner at Dechert, said.
Nicholas Rizzi can be reached at nrizzi@commercialobserver.com.
