Key Takeaways
- Approximately $2 trillion in commercial real estate debt is set to mature over the next two years.
- $591B is potentially troubled.
- Lending volume surged 45% YoY.
- CRE CLO issuance is up 500% in 1H 2025.
- CMBS pipeline shows $13B+ slated for the summer months—momentum is holding.
Overview
The latest CBRE Q2 2025 report indicates that U.S. commercial real estate lending volumes have increased by 45% year-over-year, driven by heightened activity across CMBS, life company, and alternative lending segments.
While momentum is strong, the current environment demands precision. Tighter spreads, selective underwriting, and a diversified lending mix are defining deal flow. Non-agency execution is expanding, driven by healthy investor appetite across various asset classes.
This acceleration appears directly tied to preparation for the looming $2 trillion in debt maturities coming due between 2025 and 2027. Notably, 37% of this debt was originated when the federal funds rate sat below 25 basis points. This is a stark contrast to today’s 4.33% environment.
CMBS: Breaking the Seasonal Mold
The CMBS market is defying the old “Sell in May and go away” adage, with an expected pipeline volume of over $13B for the next two months and no signs of a summer slowdown. Investor demand remains strong, pushing conduit spreads tighter. Some tranches are seeing “steamy” pricing conversations.
The CLO market is also surging, with CRE CLO issuance hitting $17.26B in the first half of 2025. This represents a 500% increase over last year’s total.
Positioning for the Maturity Wall
With spreads compressing and competition for senior debt intensifying, borrowers are increasingly incorporating structural capital solutions such as C-PACE into their planning. In today’s market, these tools can reduce the weighted average cost of capital, extend fixed-rate terms, and offer a non-recourse alternative to mezzanine or preferred equity.
While not a fit for every project, C-PACE’s ability to finance energy efficiency, water conservation, and resiliency improvements at up to 30-year terms is drawing attention as the market prepares for large-scale refinancing needs. Strategically integrated, it can help sponsors preserve equity and maintain flexibility in challenging capital markets.
ABOUT CLEARWATER
Clearwater is a New York-based national direct lender specializing in C-PACE Financing for Commercial Real Estate, spanning all asset types and geographies across the U.S. We offer low-cost, fixed-rate, long-term loans ideal for new construction or recapitalizations of recently completed projects. Our team of seasoned real estate investment professionals, with extensive expertise in structured finance, crafts tailored solutions that align with the Sponsor’s needs, including hedging away negative arbitrage and flexible prepayment options.
For more information, please visit us at www.c-pace.com or email us at info@c-pace.com.
© Clearwater PACE, LLC 2025. All Rights Reserved.
Clearwater is an institutionally capitalized direct C-PACE lender focused on deploying fast, flexible capital for bold, sustainable projects spanning all asset types and geographies across the U.S.
© Clearwater PACE, LLC 2026. All Rights Reserved.
