NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA Credit Profile (KCP), a division of KBRA Analytics, releases its Day 3 recap of the Commercial Real Estate Finance Council (CREFC) June Conference 2025.
Key Takeaways
- Labor cost inflation remains a major development obstacle, particularly as stricter immigration enforcement contributes to staffing shortages and project delays.
- Rising operating expenses are prompting CRE owners to defer nonessential capital improvements, especially in multifamily, to protect cash flow.
- Tariffs remain a wildcard for CRE, with panelists expressing mixed views on their potential impact and stressing the importance of trade policy stability for market confidence.
- Although new hotel development can cost up to 40% more than acquiring existing assets, newer properties often outperform due to sponsor experience and market expertise.
- Upscale and luxury hotels are outperforming limited-service segments, supported by affluent consumer demand and fewer deferred maintenance issues.
- Office lending is showing signs of life, led by commercial mortgage-backed securities (CMBS), with office potentially growing to 25% of conduit issuance.
- Recapitalizations remain a key theme for aging office stock, with family offices and sovereign wealth funds stepping in as private equity holds back.
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Contacts
Daniel Greathouse, Senior Analyst, KCP
+1 215-882-5439
daniel.greathouse@kbra.com
Michael Ellis, Associate Director, KCP
+1 215-882-5842
michael.ellis@kbra.com
Brian Quintrell, Director, KCP
+1 215-882-5903
brian.quintrell@kbra.com
Media Contact
Adam Tempkin, Senior Director of Communications
+1 646-731-1347
adam.tempkin@kbra.com
