Monday Market Moves | Week of December 29, 2025

Welcome to Monday Market Moves, the weekly series from Essex Capital Markets briefing you on commercial real estate capital markets. We cover key trends in CRE debt, refinancing, and capital structures to help investors and sponsors navigate today’s financing environment.

This Week: What Worked in 2025 | Capital Strategies That Delivered

2025 forced discipline across the capital markets. Rather than focusing on macro volatility, this week’s Monday Market Moves highlights three transactions that reflect the strategies that actually worked and the lessons they reinforced.

Deal #1: Logan Square Multifamily Acquisition

• Buyer required leverage in the low 70 percent range to make the acquisition pencil

• Most lenders sized proceeds materially below target based on property-only underwriting

• A local bank took a broader view, incorporating sponsor income and balance sheet strength

• Final structure delivered an $850,000 loan at just over 70 percent loan-to-purchase

• Transaction closed smoothly and on schedule despite tighter credit conditions

What We Learned

Holistic underwriting mattered. In 2025, expanding the conversation beyond property-level cash flow often unlocked proceeds and/or structural advantages unavailable via standard credit box underwriting.

Deal #2: Roscoe Village Freddie Mac Refinance

• Tight property-level cash flow initially pointed toward a potential cash-in refinance

• Freddie Mac Small Balance Loan program remained viable, but execution was sensitive

• Insurance compliance became a gating item as Freddie standards tightened mid-process

• Final structure avoided a cash-in, included two years of interest-only, and preserved liquidity

• Loan closed within the rate-lock window on a five-year fixed, non-recourse basis

What We Learned

Agency financing still delivered strong outcomes in 2025, but only with disciplined timing, documentation, and attention to detail around evolving compliance requirements.

Deal #3: Out-of-State Acquisition Financing

• Sponsor pursued a 1031 exchange with a firm closing deadline

• Out-of-state asset and student-adjacent location narrowed the lender universe

• Regional banks were approached both locally and in the local market of the asset

• Rate was locked during a Treasury dip, improving pricing by 52 basis points

• Loan proceeds increased by nearly 11 percent just days before closing

• Transaction closed on time with a local Chicago based relationship-oriented lender positioned for future growth with a strong owner-operator

What We Learned

Execution and timing materially changed outcomes. Active lender engagement and market monitoring created both pricing and proceeds advantages in a tight window.

Year-End Takeaway

Across all three transactions, the same themes repeated. Preparation outperformed timing. Overall, structure no simply pricing or leverage, drove transaction results. And certainty consistently beat idealized assumptions. As we head into 2026, these lessons continue to shape how successful borrowers approach refinancing, acquisitions, and capital planning.

We’re grateful to our clients and lending partners for navigating a demanding year together and look forward to building on these insights in the year ahead.

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