January kicked off with three industry conferences across the country: the CRE Finance Council (CREFC) in Miami, the Americas Lodging Investment Summit (ALIS) in Los Angeles, and the National Multifamily Housing Council (NMHC) Annual Meeting in Las Vegas. These events brought together thousands of investors, developers, financiers, and related parties. Below are key takeaways from sessions, meetings, and discussions with participants.

CREFC

• Sentiment points to 2025 as the year the dam starts to break, with over-leveraged owners either voluntarily selling or being forced to transact by their lenders.
• Interest rates may come down, but the market is not anticipating material changes; if anything, there is an expectation that rates are more likely to rise. Transaction activity should build in the second half of the year, a familiar refrain over the past two years.
• Bondholders are starting to take losses on multifamily deals. Fannie, Freddie, debt funds, and banks are all seeing loans sour. Banks are more willing to take losses if they can redeploy capital quickly. 
• The disconnect between appraisals and pro formas, particularly with expense growth assumptions, was a topic of discussion. Some sectors, like seniors housing, face appraisal issues due to lagging sales, meaning the comps used no longer represent today’s pro formas.    

ALIS

• Industry professionals sense that the market is seeking more compelling hospitality deals than those currently available.ls.
• Larger deals exceeding $100 million are expected to transact in 2025, fueled by increased debt liquidity and pent-up demand for their execution. These transactions have remained relatively illiquid for the past 24 months.
• Hospitality fundamentals are healthy, with the first quarter on pace or ahead of budget in many markets.
• Lenders are focused on extending or reworking maturing debt.

NMHC

• Debt is more readily available, and certain deals with strong sponsors can secure spreads as low as 110 over with buydowns, bringing the all-in rate to the mid-5% range.
• LP equity continues to be a challenge, especially for ground-up development. Sidelined capital wants to be in a preferred position with mid-to-upper teen yields.
• There was a lot of chatter about moving the GSEs out of conservatorship, though the how and when remain major question marks.
• Buyer appetite is significant, with pent-up demand to place capital and close deals.