Mid-Year Market Outlook

CASE STUDY

SERVICING DELAYS TO RESTORE BORROWER LIQUIDITY

Challenge: The Borrower experienced roadblocks that disrupted operations and cash flow.

Master Servicer delays stalled approvals for the Property Management Agreement and access easement.

Disbursement freeze impacted critical leasing commissions, prompting rent holdbacks from the anchor tenant.

Action: THG intervened to realign the loan and advocate for the Borrower.

THG facilitated a transfer to Special Servicing while significantly minimizing standard fees and submitted a comprehensive resolution proposal.

THG coordinated with the Mezzanine Lender and other stakeholders to build consensus and momentum.

Solution: Key resolutions underway to solve existing issues & stabilize the asset.

Retroactive approvals, fund releases, and recorded easements.

Disbursement of the final leasing commission will cure defaults and return the loan to Master Servicing.

These actions will cure all alleged defaults, reinstate operational cash flow, ensure long-term value preservation for all stakeholders, and return the loan to the Master Servicer.

MID-YEAR REPORTS

At the start of 2025, the commercial real estate industry was hopeful for a rebound, driven by expectations of falling interest rates, stronger deal flow, and renewed demand for office space. However, by April, the anticipated resurgence had not materialized. Commercial real estate sales plummeted to $26.1 billion, with significant year-over-year declines in the hotel (52%) and warehouse (34%) sectors. This downturn signaled the end of the so-called "Trump bump" that many had hoped would invigorate the market. Now as we look forward to the next six months the outlook remains mixed.

2025 Mid-Year Report

CMBS Delinquency Climbs to 5-Year High
Housing Affordability Drives Multifamily Demand
Office, Retail, and Industrial Face Lease Rollover Risk
Hotel and Office Loans See Special Servicing Pressure

Market Perspectives

JLL is “cautiously optimistic” about the market outlook.
Signs of stabilization in the logistics and living sectors.
Capital markets constrained by high interest rates.
Investors are holding back, awaiting clearer price discovery before re-entering.

2025 Real Estate Market Outlook

CBRE holds a moderately positive outlook for the CRE market but acknowledges market challenges
Highlights opportunities in: prime Office, Retail in growth markets, Industrial logistics, Multifamily housing, Data centers
Anticipated economic growth and sector-specific trends support cautious optimism

2025 Market Survey

Newmark strikes a slightly pessimistic tone in its outlook.
Widening bid-ask spreads and declining office valuations.
Notes rising cap rates across most asset classes.
Despite challenges, sees growing investor interest in: Value-add opportunities & Alternative sectors
These trends could serve as potential catalysts for a late-year rebound.

UPCOMING CONFERENCE

We will be attending the Lodging Conference in Phoenix, AZ.

October 6-9, 2025

lodgingconference.com

WHO INSPIRES DAVID GOLDFISHER

Dale Carnegie has long been an inspiration to me. Introduced to his teachings by my father in the early '90s, I’ve carried those lessons with me ever since. I’m inspired by people who lead by example and who teach through action, not just words. The idea that you don’t lose power by letting others meet their goals and make sure that they are heard and understood has always resonated with me.

Do you have questions about your portfolio or an upcoming loan maturity?

Schedule a call with us to discuss solutions tailored to today’s market.