The US commercial mortgage-backed securities (CMBS) market continues to demonstrate resilience, with strong issuance figures reported through the third quarter of 2025. While economic headwinds persist, investor demand remains robust, particularly for single-asset, single-borrower (SASB) deals. This activity is positioning 2025 to potentially grow the strongest year for CMBS issuance since the peak in 2007, before the Global Financial Crisis.
Recent data indicates a total of $30.68 billion in domestic, private-label CMBS was issued during Q3 2025, bringing the year-to-date volume to $90.85 billion, according to Trepp. This represents a 25% increase compared to the same period in 2024 and puts the market on track to exceed $121 billion by year-end. If realized, this would surpass the average annual issuance of $74.29 billion excluding the years immediately before and after the Global Financial Crisis.
SASB Deals Drive Market Momentum
The dominant force behind this year’s CMBS activity has been SASB transactions. These deals, characterized by being backed by a single property and a single borrower, accounted for $67.47 billion across 97 deals through September, a 35% increase from the previous year. Twenty of these transactions exceeded $1 billion, including the $2.65 billion Hudson Yards Mortgage Trust transaction backed by The Spiral, a 66-story office tower in Manhattan. The popularity of SASB deals reflects a preference among investors for larger, more easily understood and analyzed assets.
The continued strength in SASB issuance is notable given broader concerns about the commercial real estate sector. Office properties, in particular, have featured prominently in SASB deals, comprising 27% of the total volume. This suggests that investors are selectively targeting well-located, high-quality office buildings, even as the sector faces challenges related to remote work and economic uncertainty. Conduit lenders, meanwhile, are shifting their focus away from retail properties and towards apartments and offices.
CMBS Market Performance Amidst Economic Headwinds
Despite economic headwinds, investor demand has remained strong, helping to keep bid-ask spreads in the low-80s basis points after experiencing volatility in the spring. This indicates a continued appetite for CMBS investments, even in a challenging economic environment. The overall CMBS market is being closely watched by investors, particularly regarding delinquency rates.
Delinquency rates in CMBS stood at 6.59% as of the third quarter of 2025 and investors are scrutinizing these figures closely. While this represents a level of distress, the market has demonstrated resilience in the face of economic challenges. The performance of individual deals will vary depending on the underlying properties, borrower strength, and market conditions.
Conduit Issuance Trends
While SASB deals have dominated the market, conduit deals have remained relatively stable. Q3 2025 saw $7.18 billion across 10 transactions, bringing the year’s total to $23.38 billion, on par with 2024. Conduit deals, which pool together multiple loans, offer investors diversification but typically involve more complex underwriting and risk assessment. Notably, lenders are favoring shorter-term structures, with five-year loans comprising 70% of conduit issuance.
Looking Ahead: Potential for Continued Growth
The strong performance of the CMBS market in the first three quarters of 2025 suggests that the sector could continue to see healthy activity in the coming months. However, several factors could influence the market’s trajectory, including interest rate movements, economic growth, and the performance of the broader commercial real estate sector. The Federal Reserve’s monetary policy decisions will be particularly important, as changes in interest rates can significantly impact borrowing costs and investor demand.
The potential for annual issuance to exceed $123 billion would mark the highest total since 2007, when a substantial $230.5 billion in CMBS was issued. This level of activity would indicate a significant recovery in the CMBS market following the disruptions caused by the Global Financial Crisis and the subsequent period of subdued issuance. However, It’s important to remember that market conditions can change rapidly, and investors should carefully assess the risks and opportunities before making any investment decisions.
Key Takeaways
- Strong Issuance: The CMBS market is on track for its strongest year since 2007, with $90.85 billion in issuance through September 2025.
- SASB Dominance: Single-asset, single-borrower deals continue to drive market activity, accounting for over two-thirds of total issuance.
- Investor Demand: Despite economic headwinds, investor demand remains robust, keeping spreads relatively tight.
- Conduit Stability: Conduit issuance has remained steady, with a focus on shorter-term loan structures.
The CMBS market’s performance in the remainder of 2025 will be closely watched by investors and industry participants. The next key data point to monitor will be the fourth-quarter issuance figures, which will provide a clearer picture of the market’s overall strength and direction. Further updates on delinquency rates and economic indicators will also be crucial in assessing the health of the CMBS sector.
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