Monday Market Moves | Week of December 15, 2025

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

This Week: Stable Rates & Shifting Outcomes: Why Speed and Certainty Are Winning Deals

Credit Discipline Is Replacing Rate Volatility

After months of volatility, benchmark rates have stabilized. The 10-Year Treasury has held in a narrow range, and SOFR has flattened, giving the impression that financing conditions are improving. However, in practice, stable rates are not translating into stable proceeds, and deal outcomes are increasingly being driven by speed, certainty, and execution.

Across both refinancings and acquisitions, borrowers and buyers are learning that rate stability alone does not guarantee leverage, proceeds, or approvals. Credit standards, underwriting adjustments, and lender selectivity continue to shape outcomes in today’s market.

Credit Discipline Is Replacing Rate Volatility

Why Stable Rates Are Not Producing Stable Proceeds

While base rates have leveled off, several factors are limiting loan sizing:

• Conservative underwriting: Lenders are maintaining higher DSCR requirements and stress-testing cash flow more aggressively.

• Spread discipline: Credit spreads have remained firm, offsetting some of the benefit of Treasury and SOFR stability.

• Expense normalization: Higher insurance, taxes, and operating costs are reducing net operating income, directly impacting proceeds.

The result is a market where borrowers may see similar rates quoted, but materially different loan proceeds than expected.

National Landscape: Execution Matters More Than Pricing

Lenders Are Prioritizing Certainty of Close

Nationally, lenders remain active but selective and multifamily financing rates are only one part of how deals are being evaluated. Rather than competing aggressively on rate, many are prioritizing deals that can close efficiently with minimal execution risk. This shift is evident in:

• Shorter diligence timelines and fewer extension options

• Increased focus on sponsor liquidity and global cash flow

• Preference for stabilized assets with clean operating histories

In this environment, certainty of close is often valued more highly than marginal pricing improvements.

Chicago Signals: Speed Is Beating Price

In Chicago, this dynamic is increasingly influencing both buyer behavior and seller decisions.

• Sellers are favoring buyers with aligned financing and clear execution paths, even when competing offers are higher on paper.

• Buyers with lender relationships, a solid track record, or all-cash capacity are winning deals in competitive submarkets.

• Refinancing outcomes are strongest for borrowers who enter the market prepared, with realistic proceeds expectations and complete financial packages.

For many market participants, the question has shifted from “what’s the best price?” to “who can close with the least friction?”

Opportunities

• Borrowers who prioritize structure and certainty can still secure attractive executions despite conservative lender underwriting.

• Buyers with financing clarity can gain a competitive edge in acquisition processes.

• Early lender engagement allows sponsors to align expectations and avoid last-minute surprises.

Risks

• Assuming rate stability will materially improve proceeds may lead to misaligned expectations. All-in borrowing costs (which will effect proceeds) have more variables than simply the base rate indices.

• Delayed decision-making can increase execution risk as underwriting standards continue to evolve.

• Overly aggressive assumptions on leverage or pricing may limit lender options late in the process.

Bottom Line

Stable multifamily financing rates have brought calm to the surface of the market, but underneath, credit discipline remains firmly in place. In today’s environment, speed, preparation, and certainty are driving outcomes more than headline pricing. For Chicago borrowers and investors, success increasingly depends on execution readiness rather than waiting for further rate relief.

Sources:

https://fred.stlouisfed.org/series/DGS10
https://www.cmegroup.com/market-data/cme-group-benchmark-administration/term-sofr.html
https://www.cbre.com/press-releases/commercial-real-estate-lending-rebound-continues-despite-market-challenges
https://www.aegonam.com/aegon-insights/real-assets/us-commercial-mortgage-loans-quarterly-commentary2/
https://therealdeal.com/chicago/2025/12/05/midmarket-sales-stand-out-in-chicagos-bustling-multifamily-scene/

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