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.

Click here to view the report.

Recent Publications

• CREFC June Conference 2025: Day 1 Recap
• CREFC June Conference 2025: Day 2 Recap

About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1009905

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