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This is Deal Junkie. I’m Michael, it is 8:30 AM Eastern on Tuesday, December 9, 2025. Here’s what we’re covering today: the latest on mortgage rates, insurance costs and lending conditions; key market updates; and a spotlight on an industrial boom that’s defying the trend.

First up, interest rates and financing. The Federal Reserve cut rates twice this fall, bringing its benchmark to around 3.8%. Borrowing is a bit cheaper than a year ago, but new commercial mortgages still carry rates in the mid-6% range, making refinancing painful compared to a few years back. Lenders have tightened terms and are favoring safer deals. Banks overall are hanging in there, but offices remain a major problem: roughly 12% of office loans are delinquent, reflecting how high vacancies and remote work are straining that sector.

Next, insurance. Commercial property insurance premiums have roughly doubled since 2021 and are still climbing (though a bit more slowly now). In disaster-prone areas – hurricane-exposed coasts, wildfire zones – some insurers have pulled out, and those remaining are charging steep prices. These costs are squeezing property incomes and making deals harder to pencil out, especially in those high-risk markets.

Yet there are signs of life in deal-making. Third quarter sales volumes rebounded sharply, indicating buyers and sellers are starting to find common ground. Many investors have adjusted to higher financing costs. Multifamily and industrial deals in particular are moving again, since those sectors still have solid demand. Even some office buildings are trading – often at bargain prices or with plans to convert them to new uses. It’s a positive turn from the market freeze we saw a year ago.

On the lending front, a massive wall of loan maturities is looming in 2026 – about $900 billion coming due. Many lenders are extending loans to buy time, hoping rates will be lower or values higher by then. But that only delays the reckoning. If not, especially for offices, some owners will face tough decisions. That’s why there’s a push for solutions like office-to-residential conversions. New York, for example, is encouraging turning underused office towers into housing. It’s not a cure-all, but it helps reduce the office glut while adding needed housing.

Meanwhile, opportunistic investors are circling. Some have capital ready to snap up distressed assets at a discount. And certain property owners are finding creative ways to raise cash. Scholastic, for example, just sold its New York City headquarters for about $386 million in a sale-leaseback – they’ll lease back their space, but they’ve freed up a lot of capital. It shows that even in a tough office market, a prime building can find a buyer if the deal is structured right.

Finally, our regional spotlight is on the U.S.-Mexico border, where industrial real estate is booming. Companies are nearshoring production to Mexico, and border cities like El Paso and Laredo are big winners. Cross-border trade is at an all-time high – Mexico is now the U.S.’s largest trading partner – driving huge demand for warehouses on the U.S. side. In El Paso, industrial vacancy is extremely low despite a surge of new construction; developers are even putting up buildings without signed tenants, confident demand will follow. This logistics boom has turned these border cities into vibrant industrial hubs. It’s a bright spot in an otherwise cautious year for commercial real estate.

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 3, 2025. Here’s what we’re covering today: an up-to-the-minute look at commercial real estate financing conditions, the latest national CRE news and capital markets trends, plus a regional spotlight on a brewing crisis in New York’s housing market.

Let’s start with the cost of money. Interest rates for commercial mortgages remain elevated relative to a few years ago, but they’ve finally stabilized. The Federal Reserve’s campaign of rate hikes has given way to cautious easing – after a series of cuts in late 2024, there’s even speculation we might see another trim in rates at the Fed’s meeting this month. That has borrowers and lenders alike feeling a bit more optimistic. The 10-year Treasury yield is hovering around 4%, translating to many commercial mortgage rates in the mid-5% to low-6% range for solid deals. Those rates are still high compared to the rock-bottom era of 2021, but they’re down from the peaks we saw last year, giving borrowers some breathing room. Lending conditions are improving as a result: banks and debt funds that had slammed on the brakes are slowly getting back to business. In fact, a new report showed commercial loan originations jumped last quarter to their highest pace since 2018. Lenders are still cautious, but credit spreads have narrowed and competition to fund good projects is picking up again, especially in multifamily lending.

Insurance costs have been another hurdle for real estate, and here too there’s a bit of relief. After several years of sharp premium hikes – driven by natural disasters, rising construction costs, and inflation – the pace of increase is finally slowing in 2025. Nationwide, commercial property insurance premiums are still up year-over-year, but instead of double-digit jumps we’re now seeing more moderate single-digit growth on average. For well-managed properties outside of disaster zones, some insurers are even starting to soften their rates or offer better terms, thanks to fewer big losses and improved reinsurance conditions. However, it’s not all clear skies: in high-risk coastal regions and places hit by severe storms, insurance remains a pain point. Many owners in those areas face soaring premiums or trouble securing coverage at all, as major insurers pulled back from what they consider unprofitable markets. So while insurance pressure is easing generally, it continues to weigh heavily on properties in Florida, California, and other climate-challenged markets.

Now, turning to the national commercial real estate market, we’re seeing some cautiously upbeat signs. Commercial property prices have shown five straight months of gains through October, a welcome trend after the steep declines of the past couple of years. Values on average are still well below the peak reached in 2022, but this recent upward creep suggests we may have hit bottom and entered a slow recovery. Investor sentiment is improving too: after sitting on the sidelines, big institutional players like pension funds and insurance companies are tiptoeing back into CRE. In fact, for the first time in three years, large institutions were net buyers of commercial real estate in 2025 – a notable pivot that indicates they see bargains in the market. Some high-profile investors are scooping up assets at a discount, especially in sectors they have high conviction in. We’re also noticing that new construction has pulled back significantly due to high financing and construction costs. That lack of new supply could turn into an unexpected ally for landlords, potentially driving up occupancy and rents in existing buildings since there’s less competition from shiny new projects coming online.

Capital markets are reflecting this cautious optimism. Publicly traded real estate investment trusts – REITs – have seen their stock values rebound lately, as investors recognize that many REITs are trading at steep discounts to the value of their underlying properties. REITs in key sectors are boasting strong occupancy rates, often as high or higher than their private market peers, and they offer relatively attractive yields. In plain English, the stock market may have oversold real estate companies during the downturn, and now it’s correcting. This REIT revival is a positive sign for the broader market, because it means investors are regaining confidence in property income streams. At the same time, all eyes are on the Fed’s next move. With economic signals mixed and inflation now closer to target, many expect at least one more interest rate cut by early 2026. If the Fed does cut rates this month or signals a gentler path, it could provide another boost – lowering the cost of capital and potentially nudging more buyers off the fence to do deals.

Let’s talk deal activity and lending on the ground. Thanks to the stabilizing rate environment, commercial real estate deal volume is slowly coming back to life. Brokers report more bids showing up on quality assets now than six months ago. We even saw a surge in bidding in October led by multifamily properties – not too surprising, since apartments remain in high demand and financiers like Fannie Mae and Freddie Mac are very eager to lend on them. Industrial properties – think warehouses and distribution centers – are another hot ticket, continuing their years-long run as darlings of investors due to e-commerce and supply chain needs. On the flip side, the office sector still struggles to find its footing; buyers and lenders remain very picky there, focusing only on the best, most modern buildings or deeply discounted opportunities. Overall, though, the mood has shifted from fear to cautious optimism. Lenders are more willing to extend credit than they were a year ago, and borrowers are adapting to the new normal of higher rates by bringing more equity to the table or structuring creative financing. Importantly, the logjam between what sellers want and what buyers will pay is starting to break. As price expectations adjust – with sellers accepting that 2021 values are gone and buyers realizing not every asset will be a fire sale – we’re seeing more transactions actually get done.

That said, we can’t ignore the distress signals that are still out there. Perhaps the biggest red flag remains in the office market. Recent data on commercial mortgage-backed securities showed office loan delinquencies hitting an all-time high – roughly 12% of securitized office mortgages were delinquent as of the last reading. In plain terms, a lot of office landlords are defaulting on their loans, especially on older or half-empty buildings that haven’t recovered from the remote work era. Many of those owners are opting to hand back the keys rather than refinance at interest rates that just don’t make sense for a struggling property. Even the multifamily sector, which has been the standout performer, isn’t completely immune: delinquency rates on apartment building loans ticked above 7% in the securitized debt world, the highest level in about a decade. That’s partly because some landlords who took on short-term or floating-rate debt are feeling the squeeze from higher interest costs, and also a few markets have seen a flood of new apartments that’s slowing rent growth. We’re also watching the retail sector – while well-located shopping centers and essential retail are doing okay, some older malls and properties without strong tenant lineups are under stress. The good news is that banks and investors have been working through these challenges gradually. We haven’t seen a 2008-style avalanche of distress, but rather a steady trickle of problem loans being restructured, sold off, or resolved. This process will continue into next year. It’s a phase of the cycle where the weaker hands are shaken out, and often that sets the stage for a healthier recovery once the dust settles.

Regional Spotlight – New York City: In today’s spotlight story, we hone in on a potentially major issue unfolding in New York’s affordable housing market. Landlords of rent-stabilized and subsidized apartments in NYC are warning of widespread financial trouble unless they get a significant lifeline from the city. They’re asking for about $1 billion in aid to offset their rising costs. Here’s the situation: these landlords operate buildings with regulated low rents, and they’ve been hit hard by skyrocketing expenses – property taxes are up, maintenance and labor costs are up, and insurance costs have climbed dramatically (as we discussed earlier). To make matters worse, there’s talk of a potential rent freeze on those apartments to protect tenants. Freezing rents might help residents in the short term, but it would also mean landlords have no way to increase income to cover the higher expenses. According to the owners, the math just doesn’t work: if nothing changes, many affordable housing buildings could default on their mortgages or fall into disrepair. They argue that without emergency assistance, hundreds of buildings home to thousands of low-income families are at risk. City officials are now under pressure to respond. No one wants to see a wave of defaults that could push people out of their homes and undermine the city’s stock of affordable housing. It’s a delicate balance – New York needs to keep housing affordable for tenants, but it also must ensure the financial viability of those housing providers. This will be an important story to watch, as the outcome could set a precedent for how other cities handle the squeeze on affordable housing when operating costs soar.

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 2, 2025. Here’s what we’re covering today: an overview of mortgage rates, insurance costs, and lending conditions shaping commercial real estate; the latest national property news and capital markets updates; a check-in on lending trends, deal activity, and distress signals; and a regional spotlight on San Francisco’s beleaguered office market.

Mortgage, Insurance & Lending Conditions: We begin with the financing environment. Interest rates are finally ticking down after the Fed’s aggressive hikes over the past few years. In fact, the Federal Reserve has cut rates twice since September, bringing short-term borrowing costs to their lowest point in three years. Still, “low” is relative – the 10-year Treasury yield is hovering around 4%, and many commercial mortgage rates are ranging from the mid-5% for the most creditworthy deals to the low double-digits for riskier loans. Refinancing remains a hurdle for many property owners who locked in loans when rates were near zero. The good news is that banks appear slightly more open to lending than they were a year ago – by mid-2025 far fewer banks were tightening their credit standards compared to the height of the 2023 credit crunch. Meanwhile, the property insurance market has stabilized after the turmoil of 2023-24. Insurers have brought more capacity for standard commercial properties, and premium increases have cooled. Well-managed buildings with solid risk controls are seeing flat or even slightly lower insurance renewals this quarter. However, in disaster-prone areas – think coastal hurricane zones or wildfire regions – insurance is still costly and harder to secure, with carriers demanding higher deductibles. All in all, the cost of debt and insurance is still high by historical standards, but the pressure is easing, offering a bit of relief to the commercial real estate industry as we head into year-end.

National Market News & Capital Markets: Now let’s turn to the broader commercial real estate market. After a prolonged slump, there are signs of life. U.S. commercial property prices have been inching up this fall, suggesting the market may be finding a floor. In October, nationwide CRE price indices rose for the fifth month in a row – modest gains, but a welcome trend after years of decline in values. Industry analysts point to lower interest rates as a key factor: cheaper financing is luring some buyers back and helping deals pencil out. We’ve seen a notable uptick in sales activity as well. Commercial transaction volume over the past year is up by double digits, and more properties are trading hands as sellers adjust to the new pricing reality. Investors who sat on the sidelines are slowly re-emerging now that prices are more realistic and appear to be stabilizing. That said, the recovery is uneven. The strongest momentum is in high-quality “investment-grade” assets – the big, prime properties in major markets – which are fetching solid interest. In fact, those trophy assets have led the rebound with values even ticking slightly above last year’s levels on average, after several years of declines. On the other hand, some sectors are still under pressure: for example, office and multifamily values remain well below their 2022 peaks in many areas. So while the worst may be behind us, commercial real estate’s comeback is gradual and varies by property type. The capital markets are cautiously optimistic; real estate funds have raised significant “dry powder” this year, especially in private credit strategies, anticipating that opportunities in distressed debt and value-add deals will grow. If the Fed follows through with another rate cut later this month as many expect, it could further boost investor confidence and transactional activity going into 2026.

Lending Climate, Deal Activity & Distress Signals: How are current lending conditions and market stress shaping deals? Let’s dig in. With interest rates still relatively high, obtaining financing for new acquisitions or developments isn’t easy – but it’s getting a touch better. A year ago, banks and traditional lenders pulled back hard, but now we hear that only a small minority of banks are still tightening their lending standards. Some are even cautiously starting to compete for well-qualified borrowers again, especially for industrial, multifamily, and other favored sectors. Nevertheless, lending terms remain conservative: expect lower leverage and more scrutiny on projects’ cash flows. Many borrowers are turning to alternative lenders – private equity debt funds, insurance companies, and other non-bank sources – to fill the gap, even if it means paying a higher rate. Deal flow is still below the boom years, but improving. Brokers report that bid-ask spreads between buyers and sellers have narrowed as sellers accept the new normal on pricing. We’re also seeing creative deal structures, like seller financing or earn-outs, to bridge valuation gaps in this environment. As for distress signals, the office sector continues to flash red in some markets. Elevated vacancy rates and maturing debt are a dangerous combination. Roughly $950 billion in commercial mortgages are coming due in 2025 – that’s about 20% of all outstanding CRE debt – and a disproportionate chunk of that is tied to office buildings. Many of those loans were extended from last year, and now owners face a moment of truth: refinance at today’s higher rates, restructure the debt, or hand back the keys. We’ve already seen several high-profile office landlords default or negotiate with lenders this year, especially on older downtown buildings that are struggling to retain tenants. At the same time, not all the news is grim. In retail and hospitality real estate, there’s a genuine recovery underway – consumers are out shopping and traveling again, lifting revenues for shopping centers, hotels, and restaurants. Even some hard-hit offices are finding new life through conversions or amenities that lure workers back. Overall, the industry is watching for any tipping point: so far, defaults and delinquencies have risen from their post-pandemic lows but are nowhere near the crisis levels of 2008. The hope is that gradually easing interest costs and steady economic growth will prevent a broader wave of distress, though challenges persist in certain corners of the market.

Regional Spotlight – San Francisco: Finally, let’s shine our regional spotlight on one of the most talked-about commercial real estate markets in the country: San Francisco. The Bay Area’s office sector has been a bellwether of post-pandemic distress, and it remains the most extreme example of the challenges facing urban offices. Downtown San Francisco is dealing with record-high office vacancies – around a third of all office space sits empty, a far cry from its tech-boom heyday. This glut of vacant space, combined with years of remote work and a slow return-to-office, has hammered property values. Just to illustrate: one 16-story office building in the city’s Mid-Market neighborhood sold earlier last year for only $6.5 million after previously trading for $62 million in 2016. That’s almost a 90% collapse in value, a shocking figure that underscores the “great reset” happening in San Francisco real estate. In fact, it’s become common to see downtown buildings selling at discounts of 50% or more from their pre-pandemic valuations. This is painful for existing owners and their lenders, but it’s attracting a new breed of bargain hunters. Opportunistic investors are circling, betting that the city’s fortunes will eventually rebound. We’ve started to see some big bets: for example, a pair of prominent office towers (Market Center) sold earlier this year for about $177 million – the largest San Francisco office deal in three years – signaling that buyers will step in at the right price. Still, challenges abound. High-rise landlords are contending with reduced tenant demand and much higher insurance and security costs, not to mention a downtown that’s trying to recover its vibrancy. Local officials are pushing for conversions of older offices into housing and labs, and some tech companies are slowly expanding their footprints again, giving a glimmer of hope. But realistically, San Francisco’s road to recovery will be long. The situation there serves as a cautionary tale for other cities: it highlights how shifts in work patterns and economic shocks can profoundly shake real estate. On a brighter note, not every region is struggling – many Sun Belt markets and even New York City’s prime offices are faring better – but in this spotlight, San Francisco remains the market to watch if you want to understand the headwinds facing urban commercial real estate.

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 1, 2025. Here’s what we’re covering today: a look at the current mortgage, insurance, and lending rate conditions shaping commercial real estate; the latest national CRE news and capital markets updates; insights on lending conditions, deal activity, and signs of distress or recovery; and a regional spotlight on the Midwest. Let’s dive in.

Mortgage, Insurance, and Lending Rates Overview: We start with the financing environment. Interest rates have finally eased a bit compared to a year ago. The Federal Reserve’s late-October rate cut brought the federal funds target down to about 3.75-4.00%. As a result, benchmark lending rates like Treasury yields and SOFR are near their lows for the year. That’s welcome news for anyone looking to refinance or take out a new commercial mortgage – loans are still pricey, but at least a little cheaper than they were last winter. Mortgage rates for top-tier properties are generally down from their peak, though still higher than the ultra-low levels of 2021. On the insurance side, commercial property owners continue to wrestle with high premiums. Over the past few years, insurance costs surged due to inflation and a string of natural disasters. In 2025 we’ve seen the pace of those increases slow, but premiums remain way up from five years ago. In hurricane- and wildfire-prone regions, some insurers have even pulled back, forcing investors to budget carefully for coverage. All of this means higher operating costs and tighter lender underwriting. Lenders today are scrutinizing deals with an eye on those bigger insurance bills and debt payments. Credit standards are stricter than before, so borrowers need solid income streams and good equity to secure financing. The upside? Competition among lenders is increasing again – we’re seeing banks, life insurers, and debt funds all eager to lend on quality deals. They’re trimming loan spreads to win business, which helps offset the still-elevated base rates. So, financing is available, but the days of easy money are over; it takes a strong proposal to land the best terms now.

Top National News and Capital Markets Updates: Now turning to what’s happening across the commercial real estate market nationally. The overall picture is one of cautious improvement. U.S. commercial property sales are rebounding – in fact, transaction volume through the first three quarters of 2025 is about 18% higher than the same period in 2024. This uptick suggests that buyers and sellers are finally coming closer on pricing, and that some of the uncertainty over interest rates is lifting. With year-end approaching, there’s usually a rush to close deals, and that momentum seems to be carrying through this fourth quarter. Capital markets are showing more life: beyond bank loans, a wave of private real estate funds have been raising capital, especially for debt strategies. Just in the last two months, billions of dollars flowed into new real estate credit funds. That’s a strong signal that investors see opportunity – they’re gearing up to lend or snap up debt on commercial properties. More capital availability is a positive sign for keeping the market liquid.

Sector by sector, the news is mixed but mostly upbeat. Industrial real estate remains the golden child of CRE – demand for warehouses and logistics space is consistently robust thanks to e-commerce and supply chain modernization. Multifamily (apartments) has cooled from the frenzy of a couple years ago, but is stabilizing; rents aren’t growing at double-digit rates anymore, yet occupancy is solid in most cities and new supply is getting absorbed with only mild growing pains. The surprise story of late 2025 is retail real estate. Retail was once considered the problem child due to online shopping, but it’s enjoying a renaissance this year. In fact, the third quarter saw retail property sales jump over 40% from a year prior – the strongest quarter for retail in three years. Investors have renewed confidence in well-located shopping centers and open-air retail. Consumer spending has held up, and retailers who survived the pandemic are expanding again. Markets in the Sunbelt – places like Dallas, Houston, and Phoenix, and Orlando – led the nation in retail leasing and sales activity, showing that population growth and housing migration to those areas are fueling demand for stores. Even parts of the Northeast saw bright spots (Northern New Jersey, for example, logged gains in retail occupancy), whereas some West Coast markets are lagging a bit in retail recovery. Overall, retail rents and values are inching up, and because borrowing costs have eased slightly, the math for buyers is improving. Cap rates for retail properties have compressed a touch as financing gets a tad cheaper, meaning buyers are willing to pay more now than they were a year ago. It’s a remarkable turnaround for retail and one of the feel-good stories as we wrap up the year.

What about the office sector? Offices are still the most challenging segment of commercial real estate, no doubt. High vacancy rates persist in many downtowns, and companies continue to re-evaluate their space needs in this new hybrid-work era. However, even here we have some news: big office transactions are happening again, albeit selectively. Last quarter, over 60 office buildings priced above $50 million changed hands across the U.S. – that’s roughly 50% more large office deals than we saw in the same quarter the year before. Now, to put it in perspective, office investment is still only running at perhaps a quarter of its pre-pandemic volume, so we’re coming off a very low base. But the fact that firms like Blackstone and other opportunistic investors are buying office towers at deep discounts suggests that they smell long-term value. These buyers have strong stomachs and cash reserves, and they’re targeting high-quality buildings in prime locations – essentially betting that today’s bargain prices will pay off down the road. This uptick in office deal activity is noteworthy: it could mean we’re at or near the bottom for office valuations, and that early movers are testing the waters. We’ll see if this trend picks up into 2026. For now, office remains a special situation – lots of distress out there – but at least some capital is willing to take the risk, which is more than we could say a year ago.

In capital markets generally, conditions are better than they’ve been in recent memory. After the Fed’s actions, we’ve seen the 5- and 10-year Treasury yields hold near their lows for the year, which stabilizes long-term financing costs. Meanwhile, lending spreads – the extra yield lenders require above those benchmark rates – have tightened to some of the lowest levels in the past three years. In plain English, lenders aren’t charging as much of a premium now because there’s more competition and perhaps a sense that the worst economic risks have passed. All of these factors – slightly lower rates, tighter spreads, and ample investor capital – bode well for the deals getting done at the end of this year. The typical December deal rush is on, and it should help boost the final 2025 investment tally.

Lending Conditions, Deal Activity, and Distress Signals: Let’s talk about how lending and distress are shaping up. We know the cost of debt is high relative to a few years back, and banks have been careful, but there’s a real resilience in the lending market. Every lender – banks, insurance companies, CMBS shops, and private debt funds – has been “open for business” in some form this year, especially for safer asset types. Many deals that make it to the closing table today involve creative financing or additional equity to satisfy lenders’ stricter requirements. Borrowers with strong balance sheets or properties with steady cash flows are finding that lenders will compete to finance them. In fact, new loan originations have been rising in recent months as those sidelined in 2024 come back to the market. The presence of those new debt funds we mentioned is a game-changer: if a traditional lender says no, borrowers have more alternative sources to try now. This has helped bridge the gap in situations where, say, a regional bank might have pulled back.

Now, no discussion of 2025 would be complete without addressing the specter of distress that’s loomed over commercial real estate. Earlier in the year, many were worried about a “maturity wall” – a huge wave of loans coming due in 2025 that would need refinancing at much higher rates. Indeed, nearly a trillion dollars of commercial mortgages were set to mature this year, a bit more than in 2024. This has undoubtedly been a challenge: we’ve seen some landlords under strain, especially those holding older offices, hotels during slow seasons, or apartments bought at peak prices with floating-rate debt. Delinquency rates on commercial mortgages did rise throughout 2024 and into mid-2025. For example, the delinquency rate on loans in commercial mortgage-backed securities (which heavily reflect office troubles) climbed to levels we haven’t seen since the Great Financial Crisis. Office loan defaults in particular hit record highs this year – not surprising given remote work’s impact. Even multifamily loans saw a slight uptick in defaults as higher interest costs bit into formerly flush apartment profits.

However, here’s the important part: lately, those distress signals are looking a bit less dire than many feared. Data from late summer into fall 2025 suggests that the rise in delinquencies has slowed, and may even be plateauing. Over the past few months, the volume of newly delinquent loans each month has stabilized, and fewer loans are getting added to “watch lists” for potential trouble. In some measures, overall commercial loan delinquencies have been moving sideways instead of spiking. It appears lenders and borrowers are working through the pain rather than letting it all crash at once. We’ve seen a lot of loan extensions, modifications, and even the infusion of fresh equity by owners to keep their properties afloat. That’s one reason we haven’t had a flood of foreclosures – instead, it’s been more of a controlled burn. The distressed assets that have hit the market are being picked up by specialized investors, which actually helps clear the backlog. In fact, industry reports noted that the total volume of troubled loans and foreclosed properties actually declined slightly in one quarter this year for the first time in almost three years. It ticked up again afterward, but the key is the speed of increase is much slower than before. All this points to the notion that we might be near the peak of the distress cycle.

Now, this doesn’t mean it’s smooth sailing ahead – the workout process for bad loans can take years. We’ll likely continue to see headlines about big office landlords handing keys back to lenders or a mall going into foreclosure. But so far, the systemic risk seems contained. The broader economy is still growing modestly, and job gains – while slower – have kept leasing demand for many property types from collapsing. Strong consumer spending and a stable job market have helped keep cash flow coming in for hotels, shopping centers, apartments, and warehouses. That, in turn, gives owners and lenders more breathing room to sort out debt issues. In short, commercial real estate is navigating a tough transition period, but there are real signs of resilience. Deal activity picking up, lending liquidity improving, and distress stabilizing are all encouraging signals that the industry is working through its reset rather than falling off a cliff. As we head into 2026, many in the business are cautiously optimistic that the worst may be behind us – especially if interest rates continue to trend down or at least hold steady.

Regional Spotlight – Midwest Market Development: For our regional spotlight today, let’s shine a light on the Midwest. We often talk about the Sunbelt states grabbing all the growth, but some Midwestern markets are quietly having a moment. In fact, recent leasing data from the third quarter shows the Midwest leading the pack in an interesting way: renter demand. As the peak apartment leasing season wound down, a number of Midwest cities saw a surge in renter interest. The city that topped the charts? Cincinnati, Ohio. Yes, Cincinnati saw one of the strongest influxes of renters looking for apartments in Q3 2025. This might surprise folks who assume everyone is flocking to Florida or Texas, but it underscores a trend – affordability and quality of life are attracting people to mid-sized heartland cities. The Midwest offers lower housing costs, and as remote work and diversified job growth take hold, cities like Cincinnati, Columbus, and Kansas City are drawing in new residents seeking a balance of job opportunities and reasonable living expenses. For commercial real estate, that’s promising. More people moving in means more demand for rentals, more shoppers for retail, and ultimately more need for offices and industrial space too. We’re already seeing developers and investors take notice. In Columbus, for example, there’s significant tech and logistics investment that’s driving demand for warehouses and even data centers. In Indianapolis and Kansas City, steady population growth is supporting new multifamily projects and fueling retail leasing in suburban submarkets. The Midwest’s reputation has traditionally been slow and steady – economies centered on manufacturing, healthcare, education – not exactly boomtowns. But that steadiness can be a virtue in uncertain times. During the craziness of the pandemic housing market, many Midwest markets didn’t overheat as much, so they haven’t had as drastic a correction. Rents and property values in these cities are more grounded in local economic fundamentals like solid job markets and migration from within the region. Now, with coastal and Sunbelt markets having gotten expensive, some investors see upside in the value play the Midwest offers. It’s not the first region that comes to mind for rapid growth, but the data shows a modest rejuvenation is underway. So, keep an eye on those “flyover” states – places like Ohio, Missouri, Indiana – they just might surprise the industry with their resilience and opportunities. For example, the next time someone asks where renters are moving, you might point to Cincinnati as a case in point that the Midwest is back on the radar.

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, November 27, 2025. Here’s what we’re covering today: mortgage rates are finally easing a bit, insurance costs are squeezing real estate owners, capital markets are showing signs of life again, and one Midwestern city is emerging as a surprise leader.

First up, interest rates and lending. After a long stretch of rate hikes, we’ve seen some relief this fall. The Federal Reserve trimmed its benchmark rate, making financing slightly cheaper than a year ago. The 10-year Treasury yield is around 4%, and many commercial mortgages for solid properties are now in the mid-6% range. Borrowing is a bit more affordable than at last year’s peak, though it’s still expensive compared to the rock-bottom rates of a few years back.

At the same time, insurance costs are a growing headache. Property insurance premiums have jumped sharply, especially in disaster-prone areas and for older buildings. Some owners have seen their insurance bills double in just a few years, eating into cash flow. It’s one more thing squeezing budgets, on top of higher utility and maintenance expenses.

On the bright side, the commercial real estate market is showing some positive momentum. Many industry insiders believe values hit bottom late last year and have started inching up. Buyers are coming off the sidelines, and sales volumes are up from this time in 2024. We’re even hearing about multiple offers on high-quality deals again. Multifamily housing is especially active, thanks to persistent housing shortages in many cities. And big investors are hunting for opportunities – just this week, a major firm launched a ten-billion-dollar fund for new data center projects, betting on demand from the AI boom.

But it’s not all clear skies. Lenders remain cautious. Banks have tightened standards, and a mountain of commercial mortgages is maturing. Loans made when rates were near zero now have to refinance at much higher rates, and many owners are struggling to make the numbers work. We’re seeing stress particularly in the office sector, where some landlords with half-empty buildings have defaulted instead of refinancing. Lenders are trying to extend loans to avoid foreclosures, but experts warn that 2026 could see a jump in distressed sales if borrowing costs stay high. On the flip side, private credit funds are stepping in to fill some of the financing gap. They’ll lend on tougher deals that banks won’t touch – albeit at a steep price.

Now for our regional spotlight: the Midwest. Believe it or not, Midwestern cities are emerging as rising stars for renters. In the third quarter, Cincinnati led the nation in attracting new renters, and other heartland cities aren’t far behind. It comes down to affordability and space. As high costs push people out of coastal markets, cities across the Midwest are benefiting. Apartments in those areas are staying full, and landlords have been able to raise rents faster than the national average. Investors are taking notice of this steady demand – the Midwest’s stability and lower prices have made it a surprise bright spot in 2025.

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, November 27, 2025. Here’s what we’re covering today: mortgage rates are finally easing a bit, insurance costs are squeezing real estate owners, capital markets are showing signs of life again, and one Midwestern city is emerging as a surprise leader.

First up, interest rates and lending. After a long stretch of rate hikes, we’ve seen some relief this fall. The Federal Reserve trimmed its benchmark rate, making financing slightly cheaper than a year ago. The 10-year Treasury yield is around 4%, and many commercial mortgages for solid properties are now in the mid-6% range. Borrowing is a bit more affordable than at last year’s peak, though it’s still expensive compared to the rock-bottom rates of a few years back.

At the same time, insurance costs are a growing headache. Property insurance premiums have jumped sharply, especially in disaster-prone areas and for older buildings. Some owners have seen their insurance bills double in just a few years, eating into cash flow. It’s one more thing squeezing budgets, on top of higher utility and maintenance expenses.

On the bright side, the commercial real estate market is showing some positive momentum. Many industry insiders believe values hit bottom late last year and have started inching up. Buyers are coming off the sidelines, and sales volumes are up from this time in 2024. We’re even hearing about multiple offers on high-quality deals again. Multifamily housing is especially active, thanks to persistent housing shortages in many cities. And big investors are hunting for opportunities – just this week, a major firm launched a ten-billion-dollar fund for new data center projects, betting on demand from the AI boom.

But it’s not all clear skies. Lenders remain cautious. Banks have tightened standards, and a mountain of commercial mortgages is maturing. Loans made when rates were near zero now have to refinance at much higher rates, and many owners are struggling to make the numbers work. We’re seeing stress particularly in the office sector, where some landlords with half-empty buildings have defaulted instead of refinancing. Lenders are trying to extend loans to avoid foreclosures, but experts warn that 2026 could see a jump in distressed sales if borrowing costs stay high. On the flip side, private credit funds are stepping in to fill some of the financing gap. They’ll lend on tougher deals that banks won’t touch – albeit at a steep price.

Now for our regional spotlight: the Midwest. Believe it or not, Midwestern cities are emerging as rising stars for renters. In the third quarter, Cincinnati led the nation in attracting new renters, and other heartland cities aren’t far behind. It comes down to affordability and space. As high costs push people out of coastal markets, cities across the Midwest are benefiting. Apartments in those areas are staying full, and landlords have been able to raise rents faster than the national average. Investors are taking notice of this steady demand – the Midwest’s stability and lower prices have made it a surprise bright spot in 2025.

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!