SAN FRANCISCO--(BUSINESS WIRE)--Gantry, the largest independent commercial mortgage banking firm in the U.S., is reporting $3.1 billion in commercial mortgage production for 2024, a total that closely aligns with the firm’s pre-COVID production numbers. The firm’s national loan servicing portfolio grew to $23 billion in 2024 through new loan placements and the strategic addition of servicing portfolios in the Midwest and Western markets, with mostly all loans on track to perform as expected in a challenging market cycle.

“The past year saw the market further adjust to the higher cost of capital,” said Jeff Wilcox, Principal with Gantry. “This had a positive effect on production and a favorable dip in rates through the summer into fall presented opportunities to lock in attractive permanent financing for many of our clients. Rates in general have held in ranges that meet debt service thresholds on most legacy loans outside of office. As we move into 2025 and new policy direction from the incoming administration, balancing action with uncertainty will define early days commercial real estate planning. Expect the first quarter to be a learning curve.”

Highlight transactions from Gantry’s 2024 production totals include:

Industrial: $91 Million Construction to Permanent / Gillespie Fields iPark – San Diego
Multifamily: $128 Million Construction to Permanent / Legado at the Met – Santa Ana
Office: $84.5 Million Purchase Financing / Topa Financial Center - Hawaii
Self Storage: $70 Million Refinance / Trojan Self Storage Portfolio – California
Retail: $55.9 Million Permanent Refinance / Huntington Oaks Retail - Monrovia
Special Use: $7.15 Million Construction to Permanent / Auteur Wines – Healdsburg

Production and Trends

Gantry experienced consistent commercial mortgage production volume across 2024. While much of this activity was for refinancing maturing construction, bridge or permanent debt, a healthy number of acquisitions and new developments were financed. Developers found ready access to both traditional construction and construction-to-permanent loans with banks actively competing with insurance lenders and debt funds in the development space. Life companies remained active in all four quarters and are expected to be active and available at similar levels in 2025. Gantry’s access to a time-tested roster of correspondent and often exclusive insurance company lenders helped the firm shape unique financing structures in 2024 where sponsor, asset, and business plan quality could be articulated alongside trending values for creative underwriting. While volatility returned in the final months of 2024, for most of the year borrowers enjoyed improving rates, with treasuries in Q2/Q3 delivering the most attractive rates of the 2024 cycle.

“Gantry’s loan producers used 2024 as an opportunity to work with clients on a holistic review of their commercial real estate holdings to optimize an overall cost of capital across a portfolio of holdings,” said Gantry Principal Patrick Barkley. “While sales and acquisitions were light throughout the year, ready access to debt was available where values and cap rates aligned. Across the board, our producers were very successful refinancing existing debt with attractive fixed rate options, including maturing construction, bridge, and permanent loans. Looking forward near term, we expect to see conditions continuing to hold at current costs or to improve in 2025 barring any unforeseen or inflationary disruptions.”

Relevant trends for consideration moving into 2025 include:

• Policy direction from the new administration and how the market reacts remains an uncertainty in these early days. Gantry expects to have a much clearer read following key meetings of the MBA in San Diego this February and Washington D.C. in April.
• The Federal Reserve delivered a full 100 basis points of rate cuts in Q4 2024, with expectations now set for a slower pace to any future cuts in 2025, if any cuts at all.
• In a converse movement, yields on the 10-year treasury have jumped nearly 100 basis points during the same Q4 period. This rate has far greater impact on CRE lending.
• Borrowers should expect permanent loan rates to be in the high 5’s into the 6’s as treasuries hold at elevated yields, levels in the lower mid-range of historic norms.
• Banks in general remain quiet in the current cycle as they slowly become active again. Until we see a dramatic increase in bank liquidity, they will remain selective.
• Life Companies are a consistent source for permanent financing and have backfilled the absence of banks in the current cycle for many. Expectation is they will remain active in 2025; non-recourse terms and rate lock at application remain attractive.
• Several of Gantry’s correspondent insurance company lenders reached all-time highs in production in 2024 as they filled gaps within the marketplace.
• Agencies continue as a competitive source for multifamily financing and prioritize allocations to affordable projects. Will 2025 be the year they return to private ownership? This will be a potential policy direction the market will watch closely.
• Debt funds and private lending sources remain active in the absence of banks and cover ready bridge and construction financing options and other first note and equity structures. Their focus on yield and risk does set higher pricing for their loans.
• Lenders across the board will continue to prioritize loan allocations to multifamily, industrial, self-storage, and neighborhood or grocery anchored retail. Options for hospitality and office exist in a case-by-case basis but are far more challenging.
• Construction financing is available where demand exists to meet the necessary yields. However, increasing materials, labor, and entitlement costs in markets where demand exists have dramatically increased project costs in a higher rate climate.
• Disaster recovery for the Southeast and Southern California will strain development planning for a time as impacts to labor and materials costs work through the system.

Culture

Gantry grew its national production team through a series of strategic mergers and new hires in key markets to better serve clients and to support the firm’s continued growth in new loan production. In a strategic move to bridge the firm’s dedicated presence in the Western States to the East Coast from key Midwest markets, Gantry acquired the operations of Triad Capital Advisors and named two new principal partners to the firm’s private employee ownership structure. The firm also absorbed the operations of Westcap, a Southern California-based commercial mortgage banking firm with extensive reach throughout the Western States. Both mergers were opportunistic in that each platform included talent with definitive cultural similarities aligning at the same time with market dynamics and legacy business planning. In addition, Gantry established a first time presence in New York City with a strategic hire.

Servicing

Gantry maintains its long-running distinction as a Primary Servicer rated by Standard & Poor’s. With the integration of loan servicing portfolios overseen by Triad Capital Advisors and Westcap in tandem with organic production growth, the firm’s national loan servicing portfolio has increased to $23 billion in 2024, encompassing nearly 2,600 unique loans across the full range of CRE asset categories. The firm's internally serviced loan portfolio has consistently performed during a tough market cycle, with expectations for continued performance into 2025.

About Gantry

At Gantry, independent thinking is in our genes. As a privately held firm, we take an intentional approach to everything we do. So, as our industry consolidates and becomes less personal, we push ourselves to ignore convention, to set a high standard and to always prioritize people ahead of profits. With over 30 years of experience of loan production and managing a $23 billion national servicing portfolio, our firm leverages a well-established correspondent-driven platform to construct the best financing solutions for our clients. For those seeking a partner that delivers more, we’re a little different. The right kind of different. To find out how and why, click here: www.gantryinc.com