Monday Market Moves | Week of October 27th, 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 financing landscape.
This Week: The End-of-Year Refinance Push: Seizing a Narrow Window
With just two months left in 2025, borrowers across the country are racing to close commercial real estate refinancing deals before year-end. After several quarters of volatile yields and constrained liquidity, a combination of modest rate relief and stabilizing credit spreads has opened a brief but meaningful window for refinancing activity — particularly for multifamily and industrial assets with strong fundamentals.
National Landscape: Momentum Builds Despite Mixed Signals
The commercial real estate debt market is showing early signs of stabilization. Average loan-to-value ratios have inched up to around 64%, and spreads for agency and bank debt have compressed by roughly 15–25 basis points since late September. Multifamily and industrial remain the most liquid sectors, with life companies, agencies, and regional banks all active in low-leverage executions.
At the same time, the underlying economic data remains uneven. Inflation has cooled toward the Federal Reserve’s 2% target, yet hiring has softened and consumer sentiment has weakened. Those crosscurrents have contributed to 10-year Treasury yields inching back above 4%, a shift that’s hinting at broader caution heading into 2026.
What’s Driving the Commercial Real Estate Refinancing Wave?
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Rate Relief: An overall decline in Treasury yields and modest tightening in spreads have improved all-in borrowing costs by roughly 40–50 basis points compared to September levels.
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Cap Expirations: Many 2021–2022 floating-rate loans are approaching cap maturities, pushing borrowers to refinance before higher replacement costs hit.
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Lender Deadlines: Many banks and agencies aim to clear 2025 allocations by early December, creating a sense of urgency for borrowers who haven’t yet engaged.
Chicago Signals: Borrowers Move Quickly
Across the Chicago market, refinancing conversations are accelerating.
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Multifamily: With solid rent fundamentals and limited new supply, multifamily remains the most refinance-friendly sector. Fundamentally strong assets are enjoying agency and bank executions priced in the mid-5% range, with proceeds typically between 60–70% LTV for stabilized assets.
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Industrial: Borrowers are finding attractive bridge-to-perm and fixed-rate options for well-located logistics properties, especially along the I-55 and O’Hare corridors.
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Office: Refinancing remains challenging outside Class A assets, but some suburban and creative-office owners are exploring partial recapitalizations or short-term extensions to bridge through 2026. Assets with a sound story in a healthy submarket are still able to attract lenders.
Opportunities for Borrowers and Investors
Preparing for Commercial Real Estate Refinancing in 2026
Borrowers:
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Short-term rate relief and lender allocation deadlines make this an opportune moment to refinance or restructure existing debt.
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Floating-rate borrowers may benefit from cheaper rate cap pricing and improved swap spreads.
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Sponsors with well-leased, cash-flowing assets can pursue cash-out refinances at moderate leverage levels.
How Essex Capital Markets Is Advising Clients
At Essex Capital Markets, our team is closely tracking lender allocations, rate movements, and credit trends to help clients act decisively in this narrow window. We’re:
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Monitoring daily Treasury and SOFR volatility to pinpoint optimal lock timing.
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Coordinating with local and national lenders to secure competitive executions for year-end closings.
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Structuring flexible bridge-to-perm and refinance options that preserve liquidity and optionality for 2026.
Through our partnership with Essex Realty Group, we integrate on-the-ground market insights with capital markets expertise to help clients reposition their portfolios effectively in a shifting rate environment.
Bottom Line: Move Early, Move Smart
The final weeks of 2025 may represent the most favorable commercial real estate refinancing conditions seen in over a year. For borrowers with maturities approaching or investors positioning for acquisitions, acting now — before lender pipelines close and rate volatility returns — could make the difference between capturing opportunity and missing it.
Sources:
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GlobeSt: Delray Beach Multifamily Luxury Project Gets $139M Refi (Oct. 24, 2025)
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CRE Daily: Debt Market Stabilization Signals CRE Lending Recovery (Oct. 25, 2025)
To speak with our Capital Markets team about buying commercial real estate refinancing, please fill out the form below.