The headline numbers look encouraging. Through mid-May, private-label CMBS issuance hit $51.82 billion across 68 deals, up nearly 16% from the same period last year. The CLO market has reopened with $21.61 billion in issuance, a 60% year-over-year jump. Life insurance companies are stepping back in as buyers of structured credit. Capital is clearly returning to commercial real estate.
But the story underneath those numbers is more nuanced, and it matters a lot depending on which side of the market you’re on.
**This is a selective recovery, not a broad one.**
The deals getting done right now are not representative of the market as a whole. Single-asset, single-borrower CMBS transactions are setting the pace, outpacing conduit issuance by roughly four-to-one. Lenders and investors are gravitating toward larger, more defined deals where they can underwrite the specific asset and sponsor, not broadly syndicated pools of middle-market exposure. When capital is cautious, it gets specific.
That shift has real implications. If you’re bringing a well-leased, institutional-quality asset to market with a clean sponsor track record, the capital markets are open and getting more competitive. If you’re working through a legacy loan, a troubled asset, or anything with hair on it, you’re navigating a different environment entirely.
**Office is still transacting, selectively.**
One of the more surprising data points: office accounts for roughly 28% of SASB CMBS deals so far this year and is the largest property type in overall CMBS issuance when conduit deals are included. That might seem counterintuitive given everything happening in the sector.
What it actually reflects is that lenders are still willing to finance office, just on a deal-by-deal basis with a much higher bar for location, tenancy, and lease term. The era of broad office lending is over. Institutional-quality, well-leased suburban or market-specific office product can still attract capital. Everything else is working through a much harder road.
**Distress is elevated but contained.**
CMBS delinquency volume reached $45.02 billion through April, or about 7.53% of the tracked universe. That number has moved around, but the movement is being driven largely by a handful of large loans, concentrated office exposure and maturity-related defaults, rather than broad deterioration across property types.
What’s notable is the resolution pace. According to Trepp, $9.61 billion moved into special servicing through April, while $9.06 billion was resolved or worked out over the same period. The system is keeping pace. That’s not a sign of a clean market, but it is a sign of a functioning one.
**What this means for buyers and investors right now**
The market is more active and spreads have tightened, but selectivity still defines where capital goes. For investors and owners in well-performing asset classes like net lease, industrial, grocery-anchored retail, and medical office, the financing environment is improving and transaction activity is picking up. For assets carrying legacy stress or uncertain cash flows, the path forward is still deal-specific and requires a lender willing to underwrite the story.
The recovery is real. It’s just not uniform.
Justin Langlois is a commercial real estate investment sales broker at Stirling Properties, licensed in Louisiana. He focuses on income-producing properties across retail, office, industrial, and net lease sectors.
