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This is Deal Junkie. I’m Michael, it’s 8:30 AM Eastern on Monday, January 5, 2026. Here’s what we’re covering today: interest rates finally offer some relief, commercial real estate’s distress and resilience, and a spotlight on Miami’s booming market.

After a long run of Federal Reserve rate hikes, we’re finally seeing some relief. The Fed cut rates last month, bringing its benchmark down from above 5% to the mid-3% range. Long-term interest rates have eased too, and average mortgage rates have dipped back into the high-5% range – the lowest in over a year. Cheaper debt is starting to revive refinancing and deal-making, but rates are still much higher than a few years ago, so investors remain cautious.

Property insurance costs are another major headache for real estate. Huge disaster losses in 2025 – from wildfires to severe storms – have pushed insurers to sharply raise premiums and pull back from risky markets. Insurance bills have skyrocketed in places like California and Florida, squeezing property cash flows and forcing buyers and lenders to scrutinize those costs more than ever.

Now let’s turn to commercial real estate. Offices remain the toughest sector. Vacancy rates are still near record highs, around 18% nationally, and many older buildings can’t find tenants. Office landlords with heavy debt loads are feeling the pain: loan default rates hit record levels in 2025, and some owners have even walked away from struggling properties. The remote-work era has left a glut of office space in some cities. On the bright side, high-end office towers are capturing some tenant demand as companies consolidate into better spaces, and with new construction at a standstill, we may be nearing a bottom.

Elsewhere, other property types are faring better. Multifamily apartments and industrial warehouses continue to perform well. Investors are still putting money into those areas – for example, KKR recently bought a Dallas industrial portfolio for $124 million, and Google’s parent Alphabet just announced a nearly $5 billion investment in data center facilities. Moves like these show that capital is available for opportunities with strong long-term demand, even as the overall market works through a recovery.

Overall, a cautious recovery seems to be taking shape. Sales activity ticked up late in 2025 as prices adjusted and financing got a bit easier. Lenders – from banks to private debt funds – are tiptoeing back in, and even the CMBS market is showing some life again. Government-backed lenders are also increasing support for multifamily projects this year. It’s not a boom by any means, but the industry is heading into 2026 with a sense that the worst may be behind us.

For our regional spotlight today, let’s talk about Miami. South Florida has been one of the nation’s hottest markets, with waves of new residents and companies pushing up demand across office, residential, and retail. Vacancies in Miami remain much lower than in most big cities. Developers are racing to keep up, launching dozens of new high-rises and mixed-use projects. But Miami’s rapid growth comes with challenges: a huge amount of new supply is set to hit the market, and Florida’s property insurance crisis is adding serious costs that could cool things down. Still, investors continue to pour into Miami, drawn by its economic momentum, even as they keep an eye on those rising risks.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Thursday, January 2, 2025. Here’s what we’re covering today: the latest on commercial mortgage rates and insurance costs, key updates from the real estate capital markets, and a regional spotlight on Chicago’s office sector.

Let’s start with the financial landscape. After a long stretch of rate hikes, the Federal Reserve trimmed interest rates a few times late last year, bringing its benchmark down to around 4.5% by year-end – a relief from the peak, but borrowing costs remain steep. With many commercial mortgages now around 6% to 7%, refinancing is tough and new loans are pricey. Lenders have become more selective too, so only the strongest deals are getting done. Property insurance premiums, which skyrocketed recently, remain a headache for landlords. The silver lining is those costs have started to stabilize as we enter 2025, but they’re still very high.

Now onto the market at large. The adjustment to higher rates has been painful: property values fell in 2024 and deal activity nearly froze, with the office sector hit hardest. Downtown offices in many cities are still struggling with record-high vacancies from the work-from-home trend. In some cases, owners are walking away from buildings they can’t sustain – one notable example happened in Denver. Not surprisingly, loan delinquencies have climbed. The delinquency rate on commercial mortgage-backed securities is now above 6% – the highest in years – driven mostly by troubled office loans. Lenders are cautious and shoring up their balance sheets.

It’s not all doom and gloom. There’s growing optimism that the worst of the rate shock may be behind us. As prices adjust downward, bargain-hunting investors are tiptoeing back in, and office sales volumes have even started to tick up from last year’s lows as some brave buyers snap up discounted properties. Some big players also sense opportunity: Blackstone’s president says he believes office values have bottomed in top-tier markets. Outside of offices, other property sectors are steadier. Apartments, industrial warehouses and retail have solid demand, even if growth has cooled.

We’re also tracking trends that could help offices over time. Some companies are pushing staff back on-site – Dell, for instance, just mandated a five-day office week – which could gradually refill office space if more follow suit. Meanwhile, many cities are trying to convert old office buildings into apartments to chip away at vacancies in the long run.

For our regional spotlight today, let’s focus on Chicago. Chicago’s office market has been struggling, but a recent burst of deals suggests it might be finding a floor. After a long dry spell with almost no major sales, a few downtown office buildings finally sold – and they went for fire-sale prices. In one case, a tower reportedly changed hands for under $100 million, down from over $500 million just a few years back. Such steep discounts are painful for sellers, but they’re attracting buyers and setting new baseline values. It turned into a domino effect: once one building sold at a deep discount, others followed as investors grew more confident in the pricing. Sales volumes remain far below normal and big institutions are still cautious, but at least deals are happening again. That’s a hopeful sign that Chicago’s office sector may be starting to bottom out.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, December 31, 2025. Here’s what we’re covering today: an update on interest rates and the insurance crunch, the latest commercial real estate market news and lending conditions, and a spotlight on San Francisco’s market.

Let’s start with the cost of money. After a long stretch of Fed rate hikes, we finally saw a couple of rate cuts late this year. That’s given borrowers a bit of relief, but financing remains expensive. Commercial mortgage rates are still near multi-year highs – roughly two percentage points higher than a few years ago – so deal makers remain cautious. And it’s not just interest rates squeezing real estate: property insurance has become a major headache. Premiums jumped again this year, often by double digits, especially in disaster-prone areas. Some owners now face nearly double the insurance costs of just a few years ago. Those high insurance bills, coupled with high borrowing costs, mean investors and lenders are scrutinizing deals more than ever. If the numbers don’t work, the deal won’t get done.

Nationally, the commercial real estate picture is mixed but stabilizing. Deal volume picked up in the second half of 2025 as buyers and sellers adjusted to higher rates. Sunbelt markets like Texas and Florida led the way in sales, while many coastal cities are still catching up. By property type, industrial and multifamily are bright spots – demand remains strong. Retail and hotels also fared better than expected, thanks to solid consumer spending and a rebound in travel. Offices remain the glaring weak spot. Many downtown office buildings are grappling with high vacancies and plunging values. We’ve seen office towers selling at steep discounts or even ending up in foreclosure. Even with more return-to-office mandates, there’s far more space than tenants to fill it, and that will take time to fix.

Now, on lending. Banks have kept credit tight for commercial real estate. High rates and uncertainty have made lenders much more cautious, especially with office properties and new developments. Many owners with loans coming due are finding that refinancing at today’s high rates is very difficult. So far there’s no huge wave of defaults beyond some high-profile office struggles. Many lenders are extending loans or restructuring debt to avoid write-offs, essentially buying time. Meanwhile, alternative lenders are filling some gaps, but at a higher cost and with stricter terms. The bottom line: financing is available, but only for those willing to pay more and meet tougher requirements.

Finally, let’s turn to San Francisco. Few downtowns were hit as hard as San Francisco’s, with remote work leaving offices empty and property values way down. This year, however, brought some glimmers of hope. For the first time in years, the city’s office vacancy rate has started to inch down. Tech and AI companies are leasing space again, enticed by lower rents. Big investors are returning too, scooping up properties at bargain prices. Major office and hotel deals closed at a fraction of their pre-pandemic values – a sign some are betting on a long-term recovery. Local leaders are pushing office-to-housing conversions and other efforts to revitalize the city’s core. It will be a gradual comeback, but after years of gloom there’s a sense the city has finally hit bottom and is starting to turn a corner heading into 2026.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, December 29, 2025. Here’s what we’re covering today: the latest on commercial mortgage and insurance rates, the state of the real estate market as 2025 wraps up, and a regional spotlight on Dallas-Fort Worth’s booming year.

Let’s start with financing conditions. Borrowing costs are finally easing after a long stretch of Fed rate hikes. The Fed’s latest quarter-point cut this month brought its benchmark rate down to around 3.5%. That’s lower than last year’s peak, and commercial mortgage rates have dipped from their highs. It’s a bit easier now to refinance or get deals done, though lending standards remain tight. Banks remain cautious—especially on riskier projects—but the drop in rates is a welcome relief.

One area not seeing relief is insurance. Commercial property insurance premiums have climbed sharply, especially in disaster-prone states like Florida. After back-to-back hurricanes and insurer pullouts, premiums there jumped well above the norm. Even outside Florida, owners are facing higher coverage costs. These rising expenses cut into budgets and complicate deals, since lenders factor insurance into their underwriting.

Now, how is the market looking as 2025 wraps up? There’s cautious optimism overall. After a rough couple of years, property values have mostly stabilized. Prices bottomed out in late 2024, and in 2025 the investment market slowly thawed. Deal volume ticked up and bid-ask spreads narrowed, helped by easing interest rates. It’s no boom, but momentum is building again.

That said, lenders and investors remain selective and focused on fundamentals. Underwriting is still disciplined, and a wave of loan maturities in 2026 has everyone’s attention. Solid deals with healthy cash flow can still find financing (often from alternative lenders if banks hold back), but weaker assets are under real pressure. Some struggling office owners are even defaulting on loans rather than refinancing at high rates. Meanwhile, better-performing apartments, warehouses, and essential retail properties continue to attract capital on decent terms.

Sector by sector, the differences are stark. Office is the weakest link: vacancies are high and values have plunged, especially for older downtown buildings. In some cases, owners have walked away from towers with untenable debt. On the other end, industrial and multifamily assets are holding up well. Warehouses still enjoy low vacancy and steady demand, and apartment rentals are broadly stable despite rent growth cooling. Retail has been surprisingly solid too—well-located shopping centers and storefronts have kept tenants and foot traffic as consumer spending stays steady. Hotels have also bounced back to pre-pandemic performance with travel running strong.

For our regional spotlight, let’s talk about North Texas—Dallas-Fort Worth. DFW has been one of the nation’s strongest markets this year, buoyed by corporate relocations and rapid population growth. This year saw multiple new headquarters and billions in development across the metroplex. Fort Worth alone reportedly attracted around $6–7 billion in investment, from industrial parks to mixed-use projects. With over 8 million residents and more arriving every day, demand for space is robust across the board. Industrial expansions are ongoing, housing construction is booming, and even suburban office leasing has some bright spots. Dallas-Fort Worth stands out as a magnet for growth, and it’s consistently ranked among the top real estate markets heading into 2026.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Monday, December 29, 2025. Here’s what we’re covering today: the latest on commercial mortgage and insurance rates, the state of the real estate market as 2025 wraps up, and a regional spotlight on Dallas-Fort Worth’s booming year.

Let’s start with financing conditions. Borrowing costs are finally easing after a long stretch of Fed rate hikes. The Fed’s latest quarter-point cut this month brought its benchmark rate down to around 3.5%. That’s lower than last year’s peak, and commercial mortgage rates have dipped from their highs. It’s a bit easier now to refinance or get deals done, though lending standards remain tight. Banks remain cautious—especially on riskier projects—but the drop in rates is a welcome relief.

One area not seeing relief is insurance. Commercial property insurance premiums have climbed sharply, especially in disaster-prone states like Florida. After back-to-back hurricanes and insurer pullouts, premiums there jumped well above the norm. Even outside Florida, owners are facing higher coverage costs. These rising expenses cut into budgets and complicate deals, since lenders factor insurance into their underwriting.

Now, how is the market looking as 2025 wraps up? There’s cautious optimism overall. After a rough couple of years, property values have mostly stabilized. Prices bottomed out in late 2024, and in 2025 the investment market slowly thawed. Deal volume ticked up and bid-ask spreads narrowed, helped by easing interest rates. It’s no boom, but momentum is building again.

That said, lenders and investors remain selective and focused on fundamentals. Underwriting is still disciplined, and a wave of loan maturities in 2026 has everyone’s attention. Solid deals with healthy cash flow can still find financing (often from alternative lenders if banks hold back), but weaker assets are under real pressure. Some struggling office owners are even defaulting on loans rather than refinancing at high rates. Meanwhile, better-performing apartments, warehouses, and essential retail properties continue to attract capital on decent terms.

Sector by sector, the differences are stark. Office is the weakest link: vacancies are high and values have plunged, especially for older downtown buildings. In some cases, owners have walked away from towers with untenable debt. On the other end, industrial and multifamily assets are holding up well. Warehouses still enjoy low vacancy and steady demand, and apartment rentals are broadly stable despite rent growth cooling. Retail has been surprisingly solid too—well-located shopping centers and storefronts have kept tenants and foot traffic as consumer spending stays steady. Hotels have also bounced back to pre-pandemic performance with travel running strong.

For our regional spotlight, let’s talk about North Texas—Dallas-Fort Worth. DFW has been one of the nation’s strongest markets this year, buoyed by corporate relocations and rapid population growth. This year saw multiple new headquarters and billions in development across the metroplex. Fort Worth alone reportedly attracted around $6–7 billion in investment, from industrial parks to mixed-use projects. With over 8 million residents and more arriving every day, demand for space is robust across the board. Industrial expansions are ongoing, housing construction is booming, and even suburban office leasing has some bright spots. Dallas-Fort Worth stands out as a magnet for growth, and it’s consistently ranked among the top real estate markets heading into 2026.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it’s 8:30 AM Eastern on Sunday, December 28, 2025. Here’s what we’re covering today: the latest on mortgage rates and insurance costs; an update on the national commercial real estate market and capital flows; and a regional spotlight on a record Miami deal.

Let’s start with the financing climate. Earlier this month, the Federal Reserve cut interest rates by a quarter point to the mid-3% range – its third cut this year. That’s giving borrowers some relief after the steep rate hikes of recent years. Commercial real estate loan rates have eased slightly but still average in the mid-6% range, about double what they were during the pandemic boom. Lenders remain cautious, requiring larger down payments and charging higher interest spreads. So while borrowing costs have ticked down, getting a loan is still tough without a rock-solid, well-capitalized deal. Cash-rich buyers have the upper hand, while highly leveraged players are struggling to make the numbers work.

Another headache for property owners is insurance. Premiums have surged in disaster-prone areas. Florida is a prime example: after severe hurricanes, some insurers pulled out and others hiked rates, driving commercial insurance costs well above average. Wildfire-prone western states have seen similar spikes. These soaring insurance costs cut into cash flows and complicate deals.

Now on to the market itself. 2025 has been a challenging year for commercial real estate, but a few bright spots have emerged. Distressed sales jumped to around $25 billion this year, mainly as office landlords sold buildings at steep discounts. Meanwhile, other sectors show resilience: apartments have steady demand and low vacancies; industrial properties remain solid, even if their e-commerce boom has cooled; and retail has stabilized now that weaker malls have closed and healthier shopping centers are filling up again. Even offices have a bright spot: top-tier towers in cities like New York and San Francisco have seen a modest uptick in leasing as companies lure staff back to high-end spaces, though many older offices still face high vacancies.

In the capital markets, conditions are cautiously improving. Commercial mortgage bond issuance has begun to pick up after nearly freezing last year – a sign that lenders and investors are finding their footing in a higher-rate environment. REITs had a rough 2025, barely eking out gains in an otherwise booming stock market, reflecting investors’ wariness. But with interest rates finally inching down and property values likely near a bottom, many anticipate a turnaround ahead. If financing gets cheaper, cap rates could start coming down again after their sharp rise, which would boost values and spur more deals in 2026.

And now for our regional spotlight: Miami. South Florida is closing out 2025 on a high note. This week, a group led by Oak Row Equities closed on a $520 million waterfront site in Miami’s Brickell district – the priciest land sale in the city’s history. The developers plan luxury high-rises there, and they secured about $465 million in financing from a hedge-fund lender to make it happen. It shows that even with higher rates, big money is still chasing growth markets. Miami and the Sun Belt remain magnets for investment thanks to strong population and business growth. But the fact that this deal closed after a year of financing hurdles demonstrates the confidence investors have in Miami’s prospects. While some regions are struggling to attract capital, Miami is finishing the year strong.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Saturday, December 27, 2025. Here’s what we’re covering today: an update on mortgage, insurance and lending conditions; the latest commercial real estate and capital markets news; a look at deal activity, distress signals and recovery signs; and a regional spotlight on a surprising market comeback out west.

Let’s start with financing conditions. The Federal Reserve’s rate cuts this year have brought its benchmark down to about 3.5%, so commercial mortgage rates are a bit lower than a year ago. That’s a relief for anyone refinancing, but loans are still expensive by historical standards – often around 6% even for solid properties – and lenders remain choosy on new deals. On top of that, insurance premiums keep climbing. After last year’s spike, insurers are still raising rates, and in high-risk regions some have even stopped offering coverage. In short, high borrowing costs and steep insurance bills continue to squeeze real estate owners, though there’s hope these pressures will ease in 2026.

Now onto the market itself. 2025 has seen a cautious rebound in commercial real estate after the 2024 lull. Buyers and sellers finally started to meet in the middle on pricing, and deal volume began rising again by mid-year. Multifamily and industrial properties led the way, thanks to steady demand and investor confidence in those income streams. Even the office sector saw some bargain hunters, as a few investors snapped up buildings at deep discounts. Office vacancies are still near record highs (around 20% nationally), but it’s telling that some buyers are tiptoeing back in. Overall, capital is a bit more available now than it was a year ago. The once-frozen CMBS market thawed, and banks and private debt funds cautiously stepped back in as well. Underwriting remains tight, but at least money is flowing again – selectively – for solid projects.

What about distress and recovery signals? Many property owners facing loan trouble have been renegotiating with lenders instead of defaulting. Loan modifications surged this year as roughly $1 trillion in commercial mortgages hit maturity. We did see some high-profile defaults – notably on a few big office towers that weren’t financially viable – and loan delinquencies have risen, especially on CMBS loans. But there are also signs the worst may be behind us. Industry sentiment has improved now that interest rates are inching down and property values have largely reset to realistic levels. It’s not a boom by any stretch, but the market seems to be stabilizing – “cautious optimism” is a phrase you hear a lot heading into 2026.

For our regional spotlight, we’re looking at San Francisco – a city seeing an unexpected lift in its office market. In recent years, San Francisco’s office vacancy blew past 30% as remote work took hold. But 2025 brought a spark: the city saw over 10 million square feet of offices leased this year, the most since 2019, fueled largely by artificial intelligence companies expanding. AI firms alone accounted for about 2.5 million square feet, nudging the vacancy rate down slightly for the first time in a long while (it’s still above 30%, but at least it stopped rising). It’s far from a full comeback – huge amounts of space remain empty – but interest in top-tier, tech-friendly offices is returning and the mood has shifted from gloom to cautious optimism.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Friday, December 26, 2025. Here’s what we’re covering today: the state of commercial mortgage rates and insurance, some major deals and market trends, the latest on lending conditions and distress, and a spotlight on the Dallas–Fort Worth market.

After a long stretch of rate hikes, the Federal Reserve finally pivoted this fall, cutting its benchmark rate to around 4%. That’s made commercial borrowing cheaper than it was a year ago, though financing costs are still far above the rock-bottom lows of a few years back. Lenders are cautiously re-entering the market, but they remain picky and credit is tight. Meanwhile, commercial property insurance premiums remain high after the natural disasters of recent years. The good news is those costs have started to stabilize, but insurance is still eating into many property budgets.

Even with the holiday lull, a few big deals showed what sectors investors are still bullish on. Google’s parent Alphabet is making a multi-billion-dollar play in the data center space by acquiring a developer, and private equity giant KKR bought a large Dallas-area industrial portfolio. Both moves underscore that tech infrastructure and logistics properties are still attracting capital. Meanwhile in Washington, former Senator Mitt Romney floated ending the 1031 exchange tax break to help Social Security. It’s a long-shot proposal, but even suggesting it has the industry’s attention. Overall, the market is ending the year on a firmer footing than it began. Deal activity and lending picked up modestly as interest rates eased and buyers and sellers found more common ground on pricing. It’s not a boom, but the capital markets freeze from a year ago is finally starting to thaw.

Lending conditions remain fairly tight. Banks are still risk-averse and focusing on the safest loans, so many borrowers have turned to private lenders to finance projects. The biggest stress is in the office sector. Office vacancies are at record highs in many city centers, and office loan delinquencies have surged to their worst level in a decade. Owners with half-empty office buildings and looming debt deadlines are facing hard choices: refinance by putting in more cash, sell at a steep loss, or simply default. We’ve seen all of that lately. Other property types are on steadier footing. Apartment rent growth has cooled, but most multifamily buildings are still full. Industrial warehouses remain a bright spot with low vacancy and solid demand. Even retail isn’t all bleak – grocery-anchored shopping centers are holding up fine. And a few opportunistic investors are bargain-hunting, scooping up distressed office buildings at huge discounts and betting on a long-term recovery.

Now for our regional spotlight: Dallas–Fort Worth. DFW has been a standout market in 2025. Its business-friendly climate and fast-growing population (now over 8 million people) have drawn in waves of corporate relocations and investment. This year the region saw major companies moving in and billions in new development – from new headquarters and distribution centers to big mixed-use redevelopments. It’s a Sun Belt success story: while some coastal cities grapple with office gluts, Dallas–Fort Worth is gaining jobs and filling space. Keeping up with infrastructure and housing will be an ongoing challenge, but for now the Metroplex is a bright spot leading into 2026.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Wednesday, December 24, 2025. Here’s what we’re covering today:

Rates and Financing Conditions

We’re seeing a bit of interest rate relief. The Fed has cut rates a few times since September, bringing its benchmark just below 4% (down from over 5% at last year’s peak). Commercial mortgage rates have ticked down too – loans that were above 6% can now be found in the high-5% range. It’s not cheap money, but borrowing is slightly easier than a year ago.

Other costs still sting. Property insurance premiums remain very high after the past couple of years of steep increases, especially in disaster-prone regions. Those expensive insurance bills continue to squeeze cash flows and factor into lenders’ underwriting.

National Market Trends

Nationally, commercial real estate is ending the year in a cautious mood. Lower interest rates haven’t ignited a big rebound in deals – in fact, 2025’s total sales volume may slightly trail 2024’s. Buyers and sellers remain apart on pricing, and economic jitters this fall caused some transactions to stall.

Performance varies by sector. Industrial and multifamily properties are still relatively strong, with solid demand. Essential retail (like grocery-anchored centers) is holding up too. But office buildings are struggling: the national office vacancy rate hit roughly 20% – a record high – and values for many older offices have plunged. Even in top markets, dated half-empty towers are trading at steep discounts or being considered for conversion. It’s a split market, with modern, high-quality buildings faring far better than older ones.

Lending and Distress

The lending climate has thawed compared to last year’s freeze. Banks and alternative lenders are cautiously active again, and new loan volume is up off the 2024 lows. Lenders remain conservative – demanding larger equity stakes and stronger finances – but solid projects can get financed now, and even CMBS issuance has picked up slightly, showing some confidence.

Still, financial stress is evident. Loan modifications have surged (banks report volumes are significantly higher than a year ago) as many owners seek to extend or restructure debt rather than default. Office mortgages are the biggest trouble spot: delinquency rates on office loans have jumped to around 12% in the CMBS market, an all-time high. The silver lining is that foreclosures and fire sales have been limited so far – only a small fraction of recent deals have been distressed. Most owners and lenders are trying to weather the storm. With rates coming down and virtually no new construction adding supply, there’s hope the market could start stabilizing in 2026.

Regional Spotlight: New York City

Our regional spotlight today is New York City, where a major office-to-residential conversion is underway. In Lower Manhattan, a vacant 1960s office tower at 111 Wall Street just secured an $867 million financing package to be turned into roughly 1,600 apartments. It’s one of the largest such conversion projects ever in the U.S. – a bold attempt to tackle the city’s office glut and housing shortage. Major lenders are backing the loan – a big vote of confidence in this approach. City leaders hope it becomes a model for other buildings that need a second life. If all goes well, 111 Wall Street will go from a symbol of pandemic-era office vacancy to a blueprint for urban revitalization.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!

This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, December 23, 2025. Here’s what we’re covering today: the latest on interest rates and insurance costs in commercial real estate, some big headlines in the CRE investment world, a check on lending conditions and deal activity as the year winds down, and a regional spotlight on a bold property makeover in New York City.

Mortgage, Insurance, and Rates Update: We start with the financial backdrop. Borrowing costs are finally showing a bit of relief. The Federal Reserve delivered its third rate cut of the year this month, and while that hasn’t sent commercial mortgage rates plunging, it has helped nudge them down slightly. The average 30-year fixed rate is hovering just above 6%—down from the peaks we saw last year, though still high compared to the rock-bottom rates of a few years ago. For anyone refinancing a loan from the 3-4% days, it’s still a tough pill to swallow. On the insurance front, there’s a similar story of easing but not easy: commercial property insurance premiums, which had been skyrocketing in recent years, are finally stabilizing. Insurers have pulled back some of the steep hikes, especially for buildings with good safety records, but in disaster-prone regions like coastal Florida or wildfire zones out West, coverage remains costly and hard to come by. All told, the cost of debt and insurance remains a headwind for real estate investors, but conditions are better than they were a year ago.

National CRE News and Capital Markets: Now let’s turn to what’s making news in the commercial real estate world. One headline grabbing attention is Google’s big bet on infrastructure. Alphabet, Google’s parent company, just agreed to a nearly $5 billion deal to acquire a company called Intersect Power. That firm develops data centers and energy projects, and Google’s purchase is part of its plan to invest a whopping $40 billion in Texas by 2027. It’s a massive play that underscores how tech giants are pouring capital into real assets like data centers—tying into the surge in demand for cloud computing and AI. In another major deal, private equity powerhouse KKR has snapped up a portfolio of industrial properties in the Dallas area for about $124 million. This move by KKR highlights the continued investor appetite for warehouses and logistics facilities. Industrial real estate has been the darling of the CRE industry thanks to e-commerce growth, and even as the economy cools a bit, well-leased warehouses in strong markets are trading at premium prices. These deals show that despite higher interest rates, there’s still plenty of capital chasing opportunities in select sectors. We’re also seeing solid activity in multifamily housing and retail niches: just in the past week, large apartment communities from the Carolinas to Minnesota changed hands, and a retail center near Seattle sold to an investor group. The common thread is that quality assets in markets with good demand are finding buyers, even if the overall transaction volumes are down from the frenzy of a few years back.

Lending Conditions and Deal Activity: So what’s the state of lending as we approach year-end? Cautiously optimistic might be the phrase. With interest rates stabilizing, borrowers and lenders have a clearer baseline for underwriting deals. Earlier this year, uncertainty about the Fed’s moves put a lot of transactions on ice. Now, with rates having leveled off a bit, we’re seeing more deals pencil out—though financing is by no means easy. Banks, especially regional banks, are still pretty conservative on new commercial real estate loans. Many of them got spooked by the high-profile loan troubles in the office sector and have tightened their credit standards. In fact, banks across the board have been reducing their exposure to office buildings, and some are continuing to offload or write down those loans. For new loans that are being made, interest rates in the 6% range are the norm, which is notably higher than the sub-5% rates many maturing loans carry. That gap means refinancing can be painful, and some owners are having to bring additional equity to the table or seek extensions from lenders. We’ve heard about lenders granting short-term extensions and “amend and extend” deals, basically kicking the can down the road in hopes that either rates come down further or the property’s cash flow improves. At the same time, an interesting shift is underway: private credit funds and other non-bank lenders are stepping up to fill the gap left by cautious banks. They’re often charging a higher rate or demanding more equity, but for borrowers who need flexibility or quick execution, these alternative lenders are providing crucial capital. Overall, deal activity is certainly quieter than the go-go days of 2021, but it’s far from dead—more like it’s resetting to a new normal. Investors and lenders are adjusting to the reality that 6-7% interest rates are here to stay for a while.

Distress and Recovery Signals: Let’s talk about where the market is hurting and where it’s healing. The biggest pain point remains the office sector. Demand for office space is still weak in many cities as remote and hybrid work persist. We continue to see record-high office vacancy rates and, unfortunately, rising delinquencies on office-backed loans. Recent data shows nearly 12% of office loans are delinquent nationwide, which is a stark number we haven’t seen in a long time. A number of high-profile office towers in cities like New York and Philadelphia have landed in foreclosure or had to restructure their debt this quarter. Lenders and owners are scrambling to find solutions—converting offices to other uses, selling at a discount, or just handing back the keys in some cases. This is the reality of a market trying to find its footing in a post-pandemic work landscape. On the bright side, there are signs that the worst may be behind us for sectors outside of office. Multifamily apartments, for instance, continue to perform fairly well; rents have flattened out and even softened in some overheated markets, but occupancy is generally solid and we haven’t seen a surge in apartment loan defaults. Industrial properties are still enjoying low vacancy and steady rent growth thanks to those structural demand drivers we mentioned. Even retail, which many left for dead, is seeing a comeback in certain formats—open-air shopping centers in suburban areas and well-located grocery-anchored malls have foot traffic again and investors are cautiously optimistic there. Importantly, property values overall have stopped falling after the correction of the past year or two. We’re hearing that pricing has basically reached a floor in many markets. Sellers have adjusted their expectations to the new interest rate environment, and buyers are stepping in where they see long-term value. Another silver lining: new construction has pulled back sharply, especially for offices. In fact, office construction nationwide is at a historic low. That lack of new supply could help the market reach equilibrium faster once demand eventually stabilizes. And some cities are actually seeing better-than-expected office performance—take Los Angeles, for example, which so far has held up relatively strong due to a diverse economy and limited new office development in the pipeline. So, while distress is certainly present and will likely continue into 2026 (particularly as a huge wave of commercial mortgages come due for refinancing), we are also seeing the early glimmers of recovery and adaptation. It’s a mixed bag: pain in some places, progress in others.

Regional Spotlight – Manhattan Conversion: In today’s regional spotlight, we turn to the Northeast and a notable deal in New York City. An iconic hotel in Midtown Manhattan is about to get a new life. The Stewart Hotel, a 611-room property located just across from Madison Square Garden and Penn Station, was sold this week for about $255 million. The buyers are a partnership led by Slate Property Group, and they have big plans: they’re going to convert this old hotel into residential apartments. This is a bold example of how commercial real estate investors are adapting to changing market needs. New York has a well-documented shortage of housing, and at the same time the city has older hotels and office buildings struggling to find tenants in the post-COVID era. So here you have a creative solution—take a building that’s underperforming in its current use and transform it into something with strong demand. Converting a huge hotel into apartments is no small feat; it will likely involve a gut renovation and navigating the city’s regulatory approvals, but the end result could be hundreds of new homes in a prime location. Interestingly, one of the partners in this deal is a nonprofit focused on affordable housing, which hints that a portion of these units might be designated for lower-income or supportive housing. We’ll see how that shakes out, but it aligns with the city’s push to encourage office-to-residential conversions and more affordable housing development. For Manhattan, this kind of project serves two purposes: it helps chip away at the housing crunch and it absorbs excess commercial inventory. We’ll be watching this conversion closely — if it succeeds, it could pave the way for more such reuses of outdated properties in New York and other major cities. It’s a real-time example of the market reinventing itself, turning a distressed asset into a potential win-win for investors and the community.

That’s all for now, but we’ll be back tomorrow. Don’t forget to hit follow or subscribe and leave a review to help others discover the show. I’m Michael—until next time!