Key Takeaways: CREFC Miami

Slatt Capital was very pleased to attend CREF Miami 2025, where the spotlight is on an increasingly competitive lending landscape. With banks and insurance companies aggressively growing portfolios, opportunities are clearly emerging in mid-construction financing, floating-rate debt, and office assets at reset valuations. Here are our key takeaways:

• Competition among lenders is intensifying in 2025, with banks and insurance companies aggressively seeking to grow their loan portfolios despite compressed spreads.
• Office assets present a complex lending opportunity, with most traditional lenders remaining selective but some identifying potential for outsized returns on well-positioned properties at reset valuations.
• Mid-construction financing has emerged as an attractive niche for debt funds seeking higher yields in an otherwise competitive market for stabilized assets.
• Capital sources are demonstrating a clear preference for primary markets, often choosing deals with weaker fundamentals in top-tier cities over stronger metrics in secondary locations.
• The market is seeing increased demand for floating-rate debt products as borrowers position themselves for anticipated Fed rate cuts.
• Build-for-sale rent financing structures are evolving, with revolving credit facilities gaining prominence as projects adapt to changing market conditions.
• Agency lending volumes are projected to grow but face headwinds from new compliance requirements and heightened competition.
• Relationship-focused lending strategies have emerged as a key differentiator in a market where pricing advantages are increasingly difficult to maintain.
• Preferred equity providers are actively pursuing agency refinance opportunities, though finding qualified deals remains challenging in the current environment.
• Market sentiment points to increased lending activity in 2025, supported by a more stable rate environment, though the office sector remains bifurcated.
• Liquidity in the debt markets is very strong, with CMBS and CLO spreads tightening and a very strong appetite for a combination of deals that both make sense, but also those that they can get some yield on.
• A handful of larger construction lenders are starting a very busy year and seeing increased demand for large construction loan requests as short-term rates drop and construction prices stabilize.
• Distressed-debt buyers and loan sales teams had a very busy year in 2024, and 2025 could be the busiest year yet since the GFC aftermath.