Wall Street Investors Fell Back In Love With NYC Offices In 'Epic' 2025
Lenders are ready and willing to bet on office again — especially if it’s in Manhattan. And as the nationwide rate of CMBS distress increases, owners of prime New York City office towers have emerged as the big winners of Wall Street's return to the securitized mortgage market.
CMBS lenders originated $115.2B of debt in the first 11 months of the year, the highest issuance since 2007, according to KBRA data. That surpassed last year's total of $108B and marked a 186% jump from 2023, when just $40B of CMBS loans were handed out nationwide.
New York City has captured an outsized share of the market, with $28B in CMBS debt alone tied to NYC properties, according to Trepp data provided to Bisnow. Half of that total, $14B, was lent to 11 office assets.
“It’s been an epic year for CMBS in general, and the asset class back in particular is office,” JLL Managing Director of Capital Markets Lauren Kaufman said. “There's a lot of excitement.”
In 2021, the last year that CMBS lending in New York City eclipsed $20B, office loans accounted for just over half of all originations. But roughly two-thirds of 2025’s CMBS issuance, $18.5B, was allocated to office, showing a market roaring back into high gear.
“The office recovery in New York City is front-running all the other office markets,” Kaufman said.
New York leads the nation in leasing volume, office utilization and market rents, and there is almost zero trophy office availability left in the city, all of which is driving lender enthusiasm, she added.
Tishman Speyer landed the biggest deal, $2.85B for The Spiral, followed by The Irvine Co.’s $1.5B for the MetLife Building and SL Green and PGIM’s $1.4B deal for 11 Madison.
Nick Scribani, vice chair of Newmark’s debt and structured finance group, said 2025’s CMBS volumes have come in part because recent short-term extensions expired. He was part of the team that arranged NYC’s biggest multifamily CMBS loan of the year, a $675M refinancing for Vornado and Stellar Management’s 1,328-unit Independence Plaza apartment complex in Tribeca.
“You just had a lot of deals that were on the sidelines because maybe they went through an extension or two,” he said. “A lot of it just meant that there was more product that was ready to go to market.”
When brokers shopped for lenders, they found a more competitive lending environment than in recent years, Kaufman said.
She and her team at JLL marketed La Caisse’s 3 Bryant Park to more than 100 banks, CMBS lenders, life insurance companies, and mezzanine and preferred equity lenders. The team ended up with 11 “very competitive” single-asset, single-borrower offers before closing a $1.1B loan, she said. The floating-rate debt was underwritten by Wells Fargo, Bank of America and Bank of Montreal in February.
The deal was the ninth-largest of the year, according to Trepp, just behind Deutsche Bank Center's $1.1B deal from October.
Lending enthusiasm for office hasn’t been limited just to NYC or to CMBS, brokers told Bisnow. Even standout buildings in otherwise lackluster office markets have scored competitive deals, like the $700M deal for Chicago's Bank of America Tower.
And if long-term Treasury yield levels hold steady as bank regulations continue to soften, borrowers will continue to field more competitive refinancing deals from banks as well as life insurance companies and CMBS lenders into 2026, Trepp Research Director Stephen Buschbom said.
But CMBS will likely end up having another banner year in 2026 — especially in NYC office, where loan sizes are often much larger than a single bank can foot.
“At the end of the day, it comes down to the intersection of loan size, loan structure, and lender appetite and lender ability,” he said. “For those megadeals, oftentimes the CMBS market continues to be the place where you can get the best execution.”
The CMBS loans that have been handed out have gone to trophies like The Spiral or the Seagram Building. Older assets, which have struggled with entrenched vacancies and higher rates of distress, have yet to catch the momentum. But that might change next year.
“I do think next year, in 2026, you'll see a wider variety of office deals that are going to get done,” Kaufman said.
New York's problems also don't run as deep as other parts of the country — its CMBS delinquency rate was 5.8% last month, down from 6.9% at the end of 2024, according to Trepp. The nationwide delinquency rate has risen over that same period, from 6.5% to 7.3%.
But office CMBS stress has still increased “fairly substantially” relative to 2019 levels, Buschbom said. The office delinquency rate in CMBS loans hit an all-time high of 11.8% in October.
“The fallout from the pandemic, specifically for office, is really still playing out,” he said. “We probably still have another easily 18 to 24 months left to slog through before we see that stress level come back down materially.”
