Selective confidence: U.S. office lending’s uneven rebound
Office loan originations in the U.S. rose 38% year over year, reflecting a selective return of lender confidence. Debt is flowing to markets with improving fundamentals, enabling recapitalizations and opportunistic deals.
Loan originations in Manhattan surged 374% year over year, mirroring the market’s rebound in leasing activity seen in recent quarters. Lenders mostly returned for top-tier assets, including 3 Bryant Park’s $1.1-billion refinance.
Boston and Downtown San Francisco each experienced over a 50% decline in office lending activity year over year—among the largest contractions nationally. These markets share a heavy exposure to the tech sector and saw demand heavily impacted during the pandemic.
Until occupancy rates recover more broadly and a clearer resolution of distressed assets emerges, office lending will likely remain bifurcated—cautiously flowing for the few robust markets while slowing to a trickle or drying up entirely for the rest.
