Siddharth Shrivastava

Describe the past 12 months in one word, then tell us the key lending  opportunities you and your team have uncovered. 

Resurgence. Once the Fed pivoted and signaled rate cuts at the end of 2023, it set up 2024 to be a much more conducive environment for getting financings done. While close to 80 percent of activity has been refinancing focused, we are starting to see increased acquisition activity, which will only grow in 2025. Another area of growth in 2024 has been data center lending, particularly for pre-leased construction projects. Additionally, warehouse lending has been a focus area for many banks including ourselves, and we expect them to continue in 2025.  

Are rate cuts the silver bullet the industry has been waiting for to solve all woes? 

Not entirely. While rate cuts will help solve many issues facing our industry, there have been some systemic shifts, particularly in the office sector, that will take longer to work through. Just as we saw with retail, the office market will also eventually get bifurcated between winners and losers, but that will probably take a few years. Other sectors such as multifamily, where refinancings were getting constrained by the debt service coverage ratio (DSCR), will clearly benefit from rate cuts to get refinancings done. More importantly, rate cuts will help loans sitting on bank balance sheets get refinanced in the CMBS markets, which we hope will free up banks to add new loans and get the whole financing system functioning again after the muted activity in 2022 and 2023.  

What has surprised you most in 2024’s CMBS issuance thus far? 

The total volume. While we all expected CMBS in 2024 to be materially higher than 2023, the year-to-date volume has exceeded expectations. It’s interesting that loan spreads, particularly for SASB deals, are still a fair bit wider than what we witnessed for much of the last decade. However, borrowers are taking the view that it’s best not to wait until the last possible minute, and they’d rather get a deal done now when the market has liquidity, even if it’s at levels that are wider than what we’ve seen historically.  

How does market distress continue to play out in 2025, and how can  lenders best protect themselves? 

Barring an unforeseen event, I expect the market in 2025 to be more active than 2024 as not only will there be continued activity from refinancings that need to be addressed, but acquisitions will also pick up. There is a need to deploy and recycle capital, which, coupled with a lower rate environment, will drive a pickup in sales activity when compared with 2024. Additionally, we will see a wave of office refinancings get done in 2025 in the CMBS market. I expect lenders to continue to tread with caution, particularly when it comes to construction loans and heavy transition business plans. From a structure perspective, the focus from lenders will remain along the lines of what we saw in 2024, which include reasonable leverage/debt yield, fully capitalized financings (particularly for office), tight triggers, robust guaranty structure for construction loans, etc.  

Are you still as enthusiastic about multifamily as you were three years  ago? 

Yes, but the enthusiasm is not applicable to all markets unlike three years  ago. There continues to be a housing shortage across the country. Certain markets are seeing a slowdown, but there remains plenty of opportunity in supply-constrained markets. Rates trending down will also be helpful as many deals that are coverage constrained will start penciling again.   

Tell us about a deal you’re especially proud of this past year. 

In January, we made a $395 million loan secured by 70 Pine, a unique landmarked asset in New York’s Financial District with multifamily, hotel and retail components. We had previously financed the asset in 2019, making us best positioned to tell the story again. It represented GS’s first SASB of  the year. Over the course of the year, we’ve successfully led other New York multi-family SASB deals, including River Place for Silverstein and 3Eleven for Ares and Douglaston Development.

Lightning Round:

AI: Helpful or fad? 

In my personal opinion and experience, it is a fad right now as the practical applications are still in the early stages, but it will be super helpful eventually.  

Will interest rates be below or above 4 percent on July 1, 2025?

Below.

Trump or Harris?

As a newly minted U.S. citizen, I’m excited to cast my vote for the first time privately at the ballot box. 

How many days are you in the office today? 

Five days a week, and that’s been the case since early 2021 and prior to the  pandemic as well. 

Modify or foreclose? 

Modify.

Data centers or industrial? 

Both.

Dream dinner date? 

Barack Obama.