Tag Archives: CREFinance

Positioning for Precision: How Industrial Lending Is Being Underwritten in 2025

by: Logan Bobis

Industrial real estate has long been the darling of commercial capital markets. Fueled by e-commerce, evolving supply chains, and logistics sprawl, it carried the past cycle with conviction. But as 2025 unfolds, the playbook has changed. Liquidity has not vanished, but its velocity and selectivity have. Lenders are still active, though the window has narrowed. The difference now is not just where capital is going but how capital is being underwritten and structured. 

Liquidity Hasn’t Left, It’s Just More Selective
Industrial debt capital is still active, but it’s getting more selective. CBRE reports that industrial vacancy in the U.S. rose to 6.6% in Q2 2025, the highest since 2014, even as leasing activity increased year‑over‑year by 8.5% to about 424 million square feet. Lenders are no longer underwriting speculative warehouses far from demand without strong pre‑leasing or location advantages. Today, many of the deals that close are seeing LTCs more often in the 55–60% range, tighter debt yields, and stronger reserve or contingency requirements. Capital providers are digging deeper into sponsor track record, real lease-up metrics, and the ability to manage construction cost risk in markets where completions are down and vacancy is rising.

The Bar for Execution Is Higher, But So Are the Rewards
Industrial remains favored by institutional investors, but underwriting criteria have shifted. Lenders are prioritizing projects tied to rail, ports, and urban infill, with growing focus on labor availability and operational resilience. Markets like Phoenix, Dallas Fort Worth, and the Inland Empire are still in the spotlight, but even in those hubs underwriting is more cautious. Deals that cleared in 2021 now face debt proceeds cut by 10 to 15%, while rising construction costs, up 5.7% year over year according to Q2 2025 data from Turner Construction, are forcing sponsors to bridge larger equity gaps. For those with a tested track record and clear business plans, the market is still open. It is just a different kind of open.

Shifts in Supply Chain Strategy Are Creating Underrated Opportunity
The definition of efficiency in supply chains is expanding. Beyond next day delivery, users are weighing labor force proximity, fuel costs, multimodal connectivity, and even ESG impacts. This has turned attention toward Tier 2 markets such as Reno, Savannah, Louisville, and Salt Lake City. This can also be seen in overlooked assets, particularly those with repositioning potential. Former manufacturing sites, brownfield locations with embedded infrastructure, and urban adjacent flex assets are gaining favor. These are not trophy deals but complex, time sensitive opportunities requiring layered capital and underwriting nuance.

Navigating the New Market Landscape

What makes industrial debt in 2025 so nuanced is not just construction volatility or lender retrenchment, it is the mismatch between capital appetite and deal specificity. Many lenders want to place money, but only on exact terms. Sponsors often hold strong opportunities, but need structures that reflect reality, not just theory. This is where shaping projects to meet today’s stricter underwriting standards, aligning capital stacks with true absorption curves, and connecting sponsors to lenders who can price execution risk with confidence. At Lever Capital Partners, we work with sponsors to structure projects that meet today’s stricter underwriting standards, align capital stacks with true absorption curves, and connect them with the right lenders for execution.

The Path Forward: Discipline, Not Despair
The takeaway for sponsors in mid 2025 is clear. Industrial fundamentals remain strong, but success is no longer automatic. Execution matters, relationship equity matters, and precision matters. In a market defined by tighter standards and evolving supply chain demands, turning complexity into closed deals is what will separate the next cycle’s leaders from the rest. Position your deal for success, reach out to Lever Capital Partners today.

https://www.cbre.com/insights/books/us-real-estate-market-outlook-2025/industrial?utm_.com

https://www.bisnow.com/los-angeles/news/mixed-use/sunset-boulevard-8850-sunset-silver-creek-development-foreclosure-129476

https://www.bisnow.com/los-angeles/news/construction-development/opportunity-zones-los-angeles-projects-129374

https://www.bisnow.com/los-angeles/news/hotel/los-angeles-hotels-tourism-megaevents-international-tourists-leisure-travel-129185

Why Everyone Wants Retail And Lever Knows Where It’s Headed

by: Ethan Kletter

Retail real estate is not just back, it is leading the pack. Across the U.S., investors, lenders, and developers are chasing well-located assets in a sector that has proven its resilience and growth potential. Vacancy has fallen to its lowest level in more than 20 years, rents are climbing, and competition for quality properties is fierce. But while capital is pouring in, not everyone knows where the next wave of opportunity lies.

As of Q1 2025, the U.S. retail vacancy rate stood at just 4.0 percent, down from 4.2 percent the year prior, marking the lowest level in more than two decades (CBRE). Average asking rents rose 2.1 percent year over year (JLL), while net absorption reached 15.6 million square feet, outpacing new deliveries of 9.8 million square feet (Cushman & Wakefield). These fundamentals highlight a simple reality: demand for retail space is far exceeding supply.

Neighborhood and service-oriented centers are driving much of this activity. These assets offer tenant durability, consistent foot traffic, and spending patterns that hold up even during downturns. Grocery anchored centers remain highly attractive to both investors and lenders due to their essential service nature and reliable customer base. Unanchored retail strips also provide investors with flexibility and lower downside risk, making them well-suited for re-tenanting strategies and long-term value creation.

Retail’s importance is growing as capital reallocates from sectors with weaker fundamentals. Office properties continue to face structural challenges from hybrid work and declining tenant demand. Retail by contrast has not only stabilized post-pandemic but proven its resilience and ability to adapt.

Demographic trends are also fueling retail’s relevance. Population growth in Sun Belt and other high-migration markets is increasing the need for neighborhood and service-based retail. Inflation and consumer spending shifts are driving demand for accessible, essential-service retail closer to where people live. At the same time, consolidation within the sector and the emergence of new brands are generating fresh leasing activity, adding momentum to already strong fundamentals.

Looking forward, the sector is positioned for sustained strength. Limited new construction means supply will remain constrained, keeping upward pressure on rents. Tenant quality will continue to drive asset value, favoring properties with essential-service anchors, national credit tenants, and strong leasing momentum.

Growth markets such as Charleston, Las Vegas, Phoenix, and Florida are expected to deliver outsized performance. Charleston rents, for example, increased 5.3 percent year over year in Q1 2025 (Cushman & Wakefield), fueled by strong in-migration and limited supply. These dynamics illustrate how well-positioned assets in the right markets will continue to outperform, creating opportunities for investors who can access them early.

The challenge is that barriers to entry are higher than ever. The best deals rarely make it to public listings and often trade within trusted networks. In this environment, speed, certainty of execution, and local intelligence make the difference between winning a deal and missing it entirely.

A recent example illustrates our approach. Lever Capital Partners arranged financing for a ground-up retail development in the Southwest Las Vegas submarket that included inline retail space and multiple build-to-suit pad sites. Despite lower than typical pre-leasing levels, we secured competitive financing by strategically marketing the project to lenders most likely to provide favorable terms and creating a competitive lending environment. Our endorsement of the sponsor’s proven track record and business plan enhanced lender confidence, resulting in a highly advantageous loan structure that maximized returns. The project ultimately attracted high-caliber tenants and achieved strong performance, validating both our strategy and our client’s execution.

The path forward in retail will reward those who have both access and foresight. Supply will remain constrained, tenant quality will continue to drive value, and select growth markets will deliver above-market returns for those who can move ahead of the curve. Lever Capital Partners is already positioned in these markets and actively sourcing the next generation of retail investments.

If you are looking to acquire high-performing retail assets during one of the most competitive environments in decades, our team can deliver the best available capital and close them with precision. In today’s market, everyone wants retail. The difference is knowing where it is headed. Position your retail deal for success, reach out to Lever Capital Partners today.

CBRE. (2025, April 30). U.S. Retail Figures Q1 2025. CBRE Research. https://www.cbre.com/insights/figures/q1-2025-us-retail-figures

Cushman & Wakefield. (2025, April). U.S. Shopping Center MarketBeat Q1 2025. https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/us-shopping-center-marketbeat-report

Cushman & Wakefield. (2025, April 17). Charleston Retail MarketBeat Q1 2025. https://www.cushmanwakefield.com/en/united-states/insights/us-marketbeats/charleston-marketbeats

JLL. (2025, April). U.S. Retail Market Dynamics Q1 2025. https://www.jll.com/content/dam/jllcom/en/us/documents/reports/research-reports/25-research-us-retail-market-dynamics-q1-2025.pdf

Finding Opportunity in Office: How Lever Capital Partners Is Guiding a New Wave of Deals

by: Raisa Sarkisyan

Over the past few years, the U.S. commercial real estate market has undergone a seismic shift, none more dramatically than in the office sector. Once the bedrock of institutional portfolios, office assets have faced steep headwinds in the post-COVID landscape: hybrid work trends, elevated vacancies, pricing uncertainty, and lender pullback have forced market participants to re-evaluate what makes an office deal viable.

Yet amid this turbulence, interest in office is quietly resurfacing. Opportunistic investors are re-entering the conversation, not because the storm has passed, but because they know this is when real value can be created. And Lever Capital Partners is uniquely positioned to help these investors navigate that complexity.

The Office Reset: Post-COVID Challenges and Shifting Fundamentals

The pandemic introduced lasting behavioral and structural changes. Remote and hybrid work models remain sticky, pushing vacancy rates to historic highs in many core markets. As of Q2 2025, the national office vacancy rate is approximately 19.4%, up from 12.3% pre-COVID. In key markets like San Francisco, vacancy rates have reached 28.4%, and Chicago is hovering around 25.1%.

These pressures have translated into steep value declines. Office pricing is down 35–40% from 2019 peaks, and transaction volume has dropped sharply, over 60% below pre-pandemic averages in the first half of 2025. Investor hesitation is widespread, but so is opportunity: distressed pricing, low competition, and creative repositioning strategies have made this a compelling moment for experienced capital to step in.

Why Debt Is Leading the Way

In today’s market, debt is taking the lead. With equity investors more hesitant, and valuation uncertainty driving caution, debt strategies offer greater flexibility and lower risk exposure. This has coincided with a sharp pullback from traditional lenders: CRE lending volume among banks has declined nearly 40% since 2022, and many have placed office loans in a “watch” or restricted category.

As a result, the lending landscape has shifted. Non-bank lenders now account for roughly 66% of all non-agency CRE originations, including 26% from CMBS conduits, 21% from life companies, and 19% from private credit and debt funds. Borrowers face a more fragmented and opaque market, where execution hinges on aligning with the right capital at the right time.

Lever’s Role: Capital Clarity in a Complex Market

This is where Lever Capital Partners brings outsized value. As an advisor that works across the capital stack, not as a direct lender, Lever can identify and structure financing solutions that meet the evolving needs of each sponsor and asset. That might mean sourcing bridge-to-repositioning loans, arranging preferred equity in recapitalizations, or packaging bespoke capital stacks for non-core office acquisitions.

In a market where office deals require nuance, creativity, and speed, Lever’s deep network of capital providers gives sponsors a competitive advantage.

Market Outlook: A Window for the Bold

Looking ahead, the opportunity set continues to grow. Over $80 billion in U.S. office loans are maturing over the next 18 months, many on assets worth less than their current loan balance. This wave of maturities coupled with elevated interest rates and constrained refinancing options is leading to increased distress, recapitalizations, and discounted sales.

For sponsors willing to take a long-term view, particularly on value-add or repositioning plays, the dislocation presents a rare entry point. Lever is already helping clients capitalize on this window by delivering clarity, creativity, and capital when it’s needed most.

Conclusion: Redefining the Future of Office Finance

As the office sector continues to recalibrate, one truth is clear: creativity will define the next cycle of winners. While banks retrench and others wait on the sidelines, Lever Capital Partners is helping investors move forward with confidence.

By thinking beyond traditional financing and embracing the full spectrum of the capital markets, Lever is shaping what the next generation of office deals will look like, one capital stack at a time. Position your office deal for success, reach out to Lever Capital Partners today.