Tag Archives: CREOpportunities

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.

Credit Enhancement Strategies to Strengthen Your CRE Capital Stack in 2025

by: Adam Horowitz

In 2025, commercial real estate sponsors face a capital market shaped by cautious underwriting, selective lenders, and growing pressure across all asset classes. Debt is available, but it is harder to access. Equity is even more selective, especially for transitional and value-add projects. In this environment, credit enhancement has shifted from a supplemental tactic to a strategic requirement. It is no longer just about managing risk, it is about improving leverage, reducing pricing, and increasing the likelihood of closing.

Lever Capital Partners Helps Turn Strategy Into Execution

At Lever Capital Partners, credit enhancement is more than a checklist item, it is a core part of the deal strategy. Lever works with sponsors to design and structure enhancements tailored to each project’s profile, including preferred equity layers, corporate guarantees, or interest reserves.

With direct insight into what capital providers expect today, Lever helps align sponsor needs with lender requirements. Whether you are raising mezzanine capital, improving bridge loan terms, or securing equity for a repositioning play, Lever offers full-cycle support. The result is better terms, faster approvals, and fewer surprises from term sheet to close.

Strategic Use of Credit Enhancement in Today’s Market

Today’s capital providers demand clarity, alignment, and a credible path to execution. Enhancements allow sponsors to deliver those elements, especially on deals where asset performance, tenancy, or the business plan introduces complexity. Whether you are underwriting a lease-up, recapitalizing a distressed property, or managing construction risk, enhancement strategies can bridge the gap between lender caution and sponsor execution.

Unlike prior cycles, where enhancement was often limited to third-party guarantees, 2025 calls for a more strategic, deal-specific approach. Enhancements today are structured to reflect the actual risk and to strengthen the weakest parts of the capital stack. In a competitive market, even a small advantage can help sponsors secure capital that others cannot.

Why Credit Enhancement Matters in 2025

Credit enhancement matters because lenders and investors are more cautious. Traditional financing sources have lowered loan-to-value thresholds, raised debt service coverage minimums, and added more scrutiny before issuing approvals. At the same time, transitional assets like outdated office buildings or value-add multifamily still offer strong upside if sponsors can unlock the capital to execute.

Credit enhancements help improve the deal narrative. They solve for weaknesses in underwriting, such as unproven post-renovation values or lease-up projections. They offer lenders downside protection and give investors more confidence to move forward. In short, they help turn hesitation into commitment.

Common Credit Enhancement Tools in CRE

Here are the most common credit enhancement tools used in commercial real estate:

  • Personal Guarantees
    A sponsor or principal personally backs the loan, providing a fallback in case the property underperforms.
  • Corporate Guarantees
    A related company supports repayment, giving lenders more comfort in the borrower’s financial strength.
  • Letters of Credit (LOCs)
    A bank issues a letter of credit on the borrower’s behalf, guaranteeing payment to the lender in the event of default.
  • Cash Collateral
     Cash reserves are placed in escrow, typically for interest or operating shortfalls.
  • Mezzanine Debt or Preferred Equity
    These fill gaps in the capital stack and are structured to protect senior lenders while allowing the project to move forward.

Final Thoughts

In today’s market, credit enhancement is no longer optional. It is the edge that allows sponsors to win deals in a competitive, cautious capital environment. In a cycle defined by complexity, timelines, and tighter underwriting, the sponsors who succeed will be those who come prepared and structured.

With the right enhancement strategy and the right advisor, sponsors can turn complexity into opportunity, and gain access to capital others cannot. Position your deal for approval in today’s market, talk to us about credit enhancement solutions.

Why Slower Rent Growth Doesn’t Mean the End of Multifamily Investing

by: Adam Horowitz

The U.S. multifamily market, once the golden child of commercial real estate, is entering a new phase in 2025. After years of rapid rent growth, the pace has slowed. National averages show rents flattening or even declining in some overbuilt markets. The culprits are clear, a surge of new supply in key metros, rising affordability pressures for renters, and more cautious household formation in the face of economic uncertainty. For value-add investors, who often rely on rent increases to power returns, this shift requires a recalibration. The opportunity is still there, but success now demands sharper strategy, disciplined underwriting, and creative capital solutions.

Capital markets have also turned more challenging. Debt is more expensive, lenders are cautious, and equity partners are scrutinizing deals with greater intensity. Sponsors pursuing value-add plays are finding capital stacks harder to assemble, especially when projected rent growth is modest. This is precisely where Lever Capital Partners can provide an edge. Lever specializes in helping sponsors structure financing solutions tailored to today’s environment, including senior loans, preferred equity, rescue capital, and bridge debt. With deep relationships across private credit funds, non-bank lenders, and institutional investors, Lever delivers not just capital access but also strategic guidance on structuring deals that align with the current risk climate. Whether it is filling a capital gap on a repositioning deal or securing equity for a complex turnaround, Lever helps sponsors navigate today’s more selective and sophisticated capital landscape.

Despite the slowdown in rent growth, opportunities remain, but they are more market and asset specific than ever. Sunbelt markets like Austin, Phoenix, and Atlanta, which absorbed a flood of new deliveries in recent years, are seeing softening rents. In contrast, Midwest cities and certain urban infill locations with limited new supply are holding up better. For value-add investors, the key is to shift focus from relying purely on rental upside to identifying properties where operational improvements, repositioning, or expense management can drive value. Upgrading amenities, improving tenant retention, and enhancing management efficiency are strategies that can deliver returns even when rents are stable. In today’s environment, true value-add means more than riding market momentum, it requires hands-on execution.

Winning capital and closing deals in 2025 will depend on how well sponsors adapt to these new realities. Lenders and investors are demanding conservative underwriting assumptions. Rent growth projections must be realistic, exit cap rates stress tested, and business plans credible. Sponsors who can demonstrate a clear, operational path to improving net operating income (NOI) rather than simply banking on market appreciation will stand out. Moreover, capital providers are looking for meaningful sponsor equity and a track record of execution, not just financial engineering. Deals must be structured with alignment between sponsor and capital partner, and offers must come with certainty of closing. In this environment, having a vetted network of capital partners and an advisor like Lever Capital can make the difference between winning and losing competitive or distressed bids.

The multifamily sector remains a cornerstone of CRE investment, but the playbook has shifted. For value-add investors, the path to returns is now through disciplined underwriting, selective asset and market targeting, and creative, well-structured capital stacks. Lever Capital Partners stands ready to help sponsors meet this moment, providing not only access to capital but also the strategic structuring expertise required in today’s slower growth market. Those who adjust their strategies to the current landscape and partner with the right capital advisors will find that opportunity still exists, even amid the cooling rents. In fact, for those prepared to adapt, this period may prove to be the foundation for the next cycle of outperformance.