CREFC's 4Q 2025 BOG Sentiment Index Approaches All-Time High as Financing Demand Hits Survey Record and Bears Disappear

NEW YORK, Jan. 22, 2026 /PRNewswire/ -- The CRE Finance Council (CREFC), the industry association representing the $6.3 trillion commercial and multifamily real estate finance sector, today released its Fourth-Quarter 2025 (4Q25) Board of Governors (BOG) Sentiment Index survey results.

The index rose 2.1% to 125.4 from 122.8 in 3Q25, approaching the all-time survey high of 126.6 set in 4Q24. This marks the third consecutive quarterly increase and signals that sentiment is consolidating near peak levels.

Conducted from January 5–9, 2026, the survey captured continued optimism anchored by record-high financing demand expectations and the elimination of negative sentiment on both interest rates and overall industry outlook. The results reflect a market that feels increasingly open, even as respondents acknowledge persistent credit stress and a bifurcated landscape for asset performance.

Key Highlights from 4Q25 Index Core Questions:

• Economic Outlook: Economic expectations improved, with 37% expecting the U.S. economy to perform better over the next 12 months—the most optimistic reading since 4Q24—while only 14% expect deterioration (49% expect no change).
  
  
• Federal Policy: Policy sentiment strengthened further, with 60% expecting positive impacts from federal legislative and regulatory actions versus just 6% expecting adverse effects (34% neutral).
  
  
• Interest Rate Impact: Rate sentiment moderated slightly from 3Q25's peak but remains strongly positive—69% expect favorable impacts from mortgage and cap rates, 31% neutral, and 0% negative for the second consecutive quarter.
  
  
• CRE Fundamentals: Expectations strengthened, with 51% anticipating improving fundamentals (occupancy, rents, NOI)—up from 46% last quarter—while those expecting deterioration held steady at 14%.
  
  
• Transaction Activity: Expectations normalized from 3Q25's elevated reading, but 74% still expect increased investor demand for CRE/multifamily assets, with zero respondents anticipating less activity.
  
  
• Financing Demand: A survey-record 97% expect increased borrower demand over the next 12 months, up from 95% last quarter, signaling continued pent-up refinancing and acquisition needs as the maturity wall looms.
  
  
• Market Liquidity: Liquidity expectations continued climbing, with 69% expecting better conditions (up from 65%) and only 3% anticipating deterioration.
  
  
• CMBS/CRE CLO Outlook: 71% expect securitized product trends to be a net positive, holding steady near recent highs despite elevated delinquencies in the underlying collateral.
  
  
• Overall Industry Sentiment: 74% hold positive outlooks for CRE finance businesses—the highest since 4Q24—with 26% neutral and zero respondents negative for the first time since 4Q24.

Additional Topical Insights:

The survey's topical questions revealed a market preparing for significant refinancing activity amid uneven outcomes. On an estimated ~$200 billion in private-label CMBS maturing through 2026 (including ~$140 billion in SASB), 60% of respondents expect bifurcated outcomes—with institutional-quality assets and strong sponsors refinancing successfully while Class B properties face principal losses. Only 11% anticipate a broad refinancing resurgence, reflecting the view that improving liquidity won't translate to uniform outcomes. With property cash flows described as 'flat to slightly down' in member comments, refinancing success will hinge on asset quality and sponsor strength rather than market-wide tailwinds.

Underwriting standards remain a watch item: 23% cited pro forma underwriting that doesn't reflect in-place cash flows as their primary credit concern, while another 23% flagged continued LTV/DSCR drift if competition intensifies. Multiple respondents described a "race to the bottom" dynamic in open-ended comments.

On multifamily, where CMBS delinquencies exceeded 7% in October 2025 for the first time in nearly a decade, 43% pointed to aggressive underwriting on recent-vintage conduit loans as the most significant risk, followed by rising operating costs compressing NOI (31%).

Views on expanded GSE multifamily lending were split: 29% expect crowd-out of private-label volume, 29% see mixed effects (crowd-out on stabilized assets but private-label retaining the transitional niche), and 17% believe GSEs and private-label serve different borrower profiles with minimal overlap.

Lisa Pendergast, President and CEO of CREFC, commented:

"This quarter's results show a market that has moved from recovery to consolidation at elevated levels. The disappearance of negative sentiment on both rates and overall outlook—combined with record financing demand expectations—tells us capital markets feel genuinely open. But our members are clear-eyed about what lies ahead: the maturity wall will be a sorting mechanism, not a rising tide. Access to capital will depend on asset quality, sponsor strength, and realistic underwriting. The 'haves versus have-nots' theme running through the open-ended responses is the defining dynamic heading into 2026."

About CREFC and the Board of Governors Sentiment Index:

The CRE Finance Council (CREFC) is the trade association for the commercial real estate finance industry. Approximately 400 companies and 19,000 individuals are members of CREFC. CREFC's members serve a critical role in the U.S. economy by financing office buildings, industrial properties, multifamily housing, retail facilities, hotels, and other types of commercial and multifamily real estate.

The Board of Governors consists of senior executives representing every sector of the commercial real estate lending and mortgage-related debt investing markets, including balance sheet and securitized lenders, loan and bond investors, mortgage bankers, private equity firms, loan servicers, rating agencies, attorneys, accountants, and others.

CREFC's BOG Sentiment Index, launched in 2017, tracks quarterly shifts in commercial real estate finance sentiment through nine equally weighted core questions, supplemented by topical insights. The 4Q25 survey achieved a 78% response rate with 35 of 45 BOG members participating.

For more information about the 4Q25 BOG Sentiment Index and the full survey results, please click here or contact Raj Aidasani at raidasani@crefc.org

SOURCE CRE Finance Council