Term Sheet: Chicago’s CMBS charge; S3’s borough backing; agencies’ potential fate

A wave of early-year commercial mortgage-backed securities deals is spelling refinancing tailwinds for Chicago’s Salesforce Tower; S3 Capital upsizes its origination appetite with a $300 million construction package for a Queens mega-development; a blurry outlook for Fannie Mae and Freddie Mac is leaving agency lenders in a grey area; and more in this week's Term Sheet.

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They said it

“Most of the groups selling today are doing so because they need to, and frankly there aren’t that many sellers out there right now” 

Brian Cornell, CFA , a managing director and portfolio manager of equity at Denver-based manager Walker & Dunlop Investment Partners , spoke during a webinar this week about how today’s bid-ask spread is reaching peaks last seen in March 2022

Read more here.

What’s new

Yankee CMBS Foxtrot

Chicago is tuning up its commercial mortgage-backed securities dealflow this week. A Hines -linked joint venture has secured a $610 million single-asset, single-borrower CMBS loan on the city’s Salesforce Tower in a transaction slated to close this week, according to a presale report from New York-based data and ratings provider Moody’s.

Queens-bound capital

Waterfront views in Queens, New York, are being reshaped by a mega-development in the Astoria neighborhood. S3 Capital, a New York-based real estate private credit manager, this week originated a $300 million development loan for a planned four-building, mixed-use complex in one of the borough’s cornerstone neighbourhoods.

Trending

Agency of change

Real estate lenders reliant on agency financing are being left in potential limbo by the US executive branch. A proposal from President Donald Trump’s administration to privatize Fannie Mae and Freddie Mac could also see the government-sponsored agencies become a cornerstone investment in a potential future US sovereign wealth fund, according to statements this week from Treasury Secretary Scott Bessent.

Data snapshot

Scaling C-PACE 

The commercial property-assessed clean energy financing sector is steadily maturing, data published by Washington-based trade group C-PACE Alliance shows. More than $2.57 billion of originations were closed across 225 C-PACE projects in 2024, marking a 22 percent increase from 2023’s volume of nearly $2.11 billion across 250 projects. However, while the aggregate value of issuances has grown, the number of issuances has decreased.

Continue reading here.

Loan in focus

Insurance runs

A pair of insurance company-backed managers worked in tandem to add industrial debt and equity exposure to their respective portfolios this week. Newark-based manager PGIM Real Estate – which placed first in the 2024 PERE Credit 50 ranking – funded a $70 million floating-rate loan on behalf of its core debt strategy. The manager financed Nuveen, a TIAA company Real Estate’s acquisition of an eight-asset industrial portfolio spanning five major US markets.

Read more here.

Get the details of this week's Term Sheet here.