Total commercial real estate lending snapped back in 2025, with borrowing and lending rising about 40% from the prior year to roughly the mid-$700 billion range, according to the Mortgage Bankers Association's latest annual origination report. For investors, the more important takeaway is not the size of the rebound but what it says about 2026: capital is back and broadly available, but it is more selective, more disciplined, with a higher focus on income and realistic pricing than in the last cycle.
2025's Rebound Becomes The New Starting Point
MBA estimates that total commercial and multifamily mortgage borrowing and lending reached about $706 billion in 2025, up from roughly $505 billion in 2024 and about $429 billion in 2023. Commercial mortgage banking firms closed around $606 billion in 2025, a 48% jump from 2024.
MBA attributes the increase to more stable capital markets and a market that has adjusted to higher-for-longer interest rates. The report suggests 2025 was not just a bounce off the bottom but a reset, as lenders and borrowers worked through a backlog of maturities and accepted new pricing for both risk and leverage.
The data points to broad-based growth across most major property types and capital sources, with the strongest gains in areas where values have already reset and cash flows are easier to underwrite. Life companies, debt funds, securitized lenders and banks all increased activity, though some institutions stayed cautious on higher-risk business plans.
Capital Is Back, But More Picky
MBA's numbers and its quarterly originations trends show a market where money is moving again, but not indiscriminately. In 2025, lending rose for several consecutive quarters on both an annual and sequential basis, led by office, retail and hotel loans, while industrial and health care grew at a slower pace. That pattern suggests lenders will lean into clear recovery stories and stable income rather than broad sector bets.
Office is a prime example. MBA's data and industry commentary indicate that lenders will finance well-leased, well-located buildings or structures that reset leverage to current values, but are still avoiding most transitional or commodity stock.
Retail and hotels, which went through significant repricing earlier in the cycle, benefited from clearer demand and more predictable cash flows, making it easier for underwriters to get comfortable at today's rates. Multifamily remains a core exposure, but growth is more measured as rent growth cools and operating costs settle into a new range.
Refinancing played a major role in 2025's jump in volume. MBA has previously noted that a large wave of loans made at pre-2022 rates reached maturity last year, forcing owners to confront higher coupons, tighter proceeds or new equity requirements as they rolled debt. That wave is still moving through the system, with a meaningful amount of debt due in 2026 and 2027 that will need structure, capital or both.
What 2026 Is Likely To Look Like
For 2026, MBA's 2025 numbers confirm that the market has moved past the "frozen" phase. By late 2025, its quarterly data showed originations up strongly year-over-year and quarter-over-quarter, marking five straight quarters of gains. That momentum now meets a backdrop of slower but positive economic growth, a Federal Reserve that has shifted from aggressive tightening to gradual easing and a steady pipeline of maturities.
MBA's previous forecasts around this cycle have pointed to continued growth in total commercial and multifamily lending, but at a more modest pace than 2025's 40% jump, with annual volumes hovering in the high-$600 billion to low-$700 billion range. The confirmation of 2025's stronger base makes those levels more realistic, even if volatility or sector-specific stress trims the top line.
For borrowers and investors, the practical effect is that 2025 has set the new reference point for spreads, leverage and structures. MBA's data suggest that underwriting now assumes more conservative cap rates, modest rent growth and higher operating costs, which narrows the gap between assumptions and current reality compared to the immediate post-pandemic period.
Deals structured around 2021-style financing assumptions will continue to struggle, while business plans calibrated to 2025-style terms stand a better chance of clearing in 2026.
Where Investors May Find Opportunity
MBA's annual report does not call out "winners," but the trends it documents help outline where opportunities are likely to appear this year. The surge in refinancing in 2025 means a larger share of the legacy loan book has been reworked, extended or recapitalized, which may reduce the volume of outright distress but increases the number of assets carrying higher debt costs and tighter coverage. That sets the stage for more joint ventures, preferred equity, rescue capital and other structure-driven deals in 2026.
Stronger lending in retail and hospitality suggests lenders are comfortable with the visibility they have into consumer spending and travel demand. That support could encourage more value-add and redevelopment strategies in those segments, especially where pricing has already adjusted and lenders can underwrite to current performance instead of pro forma wish lists.
MBA's data on increased transaction-related volumes also signals that buyers and sellers are finding ways to meet on price, even if the spread remains wider in some subsectors.
Industrial and some specialty sectors, which did not see the same degree of price correction, experienced comparatively slower lending growth. In 2026, that may translate into steadier but less dramatic returns, meaning less room for cap-rate compression but more consistent income and ready access to conservative debt capital.
MBA also notes that the recovery in 2025 was supported by multiple types of lenders. Life companies, debt funds, securitization platforms and banks are each targeting different slices of the risk spectrum, from lower-leverage fixed-rate loans to higher-leverage bridge structures.
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