CMBS borrowers are increasingly pulling back from long-term debt, opting instead for shorter loan durations as market uncertainty reshapes financing decisions. That shift has pushed five-year conduit loans from a niche product to the dominant structure, displacing the 10-year loans that once defined the market, according to Trepp.
The change has been swift and pronounced. In 2019, 10-year conduit loans accounted for 95.6% of loan counts and 92.6% of balances. By 2026, those figures had dropped to just 12.27% of counts and 19.44% of balances, a reversal Trepp describes as a "major structural" shift in borrower behavior.
For much of the last CMBS cycle, longer-term debt was the default. Borrowers favored the stability of fixed-rate financing over a decade, while investors gravitated toward predictable structures. That dynamic began to unravel after the pandemic, as rising base rates and growing uncertainty around refinancing conditions made long-term commitments less attractive.
According to Trepp's Stephen Buschbom and Thomas Taylor, borrowers have responded by prioritizing flexibility. Shorter-duration loans offer a way to manage interest rate volatility and avoid locking into terms that may prove unfavorable if market conditions shift again.
The transition accelerated after 2022. That year, 10-year loans still made up more than 91% of conduit loan counts. By 2023, the share had fallen to 53.71%, and it continued to slide sharply through 2024 and 2025 before reaching current levels. Over the same period, five-year loans moved into the mainstream, becoming the preferred structure across much of the market.
Notably, pricing does not appear to be the primary driver of this shift. Trepp data shows that spreads on 10-year conduit loans widened through 2023 and then tightened in subsequent years, a pattern that held across most major property types. While borrowing costs fluctuated, they did not move in a way that would fully explain the collapse in long-term loan demand.
Instead, the data points to a broader recalibration of risk. In sectors like lodging, where cash flows are more volatile, spreads widened significantly to 349 basis points in 2023 before tightening to 257 basis points in 2025, reflecting the premium investors require for operational risk. Office loans followed a similar pattern, with spreads rising from 227 basis points in 2022 to 320 basis points in 2023, then easing in subsequent years.
Even as spreads normalized, borrowers remained cautious about locking into long-term debt. According to Trepp, the 10-year conduit loan has not disappeared, but it is no longer the default execution. Instead, it is being used selectively, typically for assets with stronger sponsorship, lower leverage and more durable cash flow profiles.
With limited 10-year originations in 2026, property-level data has thinned, reinforcing just how far borrower preferences have shifted. What was once the standard structure has become a narrower, more specialized option in a market now defined by shorter-term thinking.
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