©2025 Real Estate Publishing Corporation July • VOL.25 NO.3
WOMEN IN REAL ESTATE SPECIAL SECTION: Page 15
Cautious capital, creative stacks: Chicago CRE financing adapts By Brandi Smith
363 Tower Rendering. Courtesy PACE Equity.
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n a market defined by high interest rates, cautious banks and shifting underwriting standards, Chicago’s commercial real estate developers are still getting deals done, but not without recalibrating their strategies and reimagining the capital stack. “There is capital to deploy but the metrics look differently than they did a few years ago,” said Julie Sommese, Illinois managing director of PACE Equity. Liquidity hasn’t dried up, but where and how that capital enters a deal has changed. Developers are adjusting to lower leverage, tighter credit conditions and changing
roles among lenders. Traditional banks are active, but not at the levels of recent years. Alternative capital sources are increasingly stepping in to replace debt that has become harder to secure. “There is plenty of debt capital in the system today,” said Dan Rosenberg, executive vice president at BWE. “Liquidity is abundant for all asset classes. Sure, multifamily is more in favor than say office, but as the basis in office buildings begins to reset, there is plenty of debt liquidity to acquire and reposition them. The cost of the liquidity ‘is what it is’ and people are hoping it will go lower.”
Multifamily, industrial and other favored asset types are still attracting lenders, particularly for stabilized or near-stabilized projects. Competition remains strongest for high-quality multifamily, retail, industrial, medical office, creditworthy single-tenant triple-net assets and self-storage. Hotel and multitenant office assets continue to face more selective underwriting. Construction financing has made a limited comeback, mainly for multifamily and industrial projects, but with FINANCE (continued on page 12)