Commercial Real Estate (CRE) Market Trends - October 2025 saw the first year-over-year negative growth in CRE deal volume since the post-Fed rate hike recovery began [1] - This slowdown reflects a stalemate between buyers and sellers due to persistently high interest rates and economic uncertainty [3] - October 2025 CRE sales still reached $244 billion, approximately 70% of October 2019 sales [3] Property Sector Performance - Industrial and multifamily properties led the top 50 deals [4] - Hotels were the only sector to improve in deal volume, with 6% growth after a negative Q3 [4] - Multifamily properties experienced the biggest pullback in October, down 27% year-over-year [5] - Despite the pullback, multifamily buildings mostly traded at a premium to previous sales [6] Notable Transactions - The New York Edition Hotel at 5 Madison Avenue was sold for $2312 million by Abu Dhabi Investment Authority to the Kamang Company [4] - This sale highlights the increased value of office-to-hotel conversions due to the pandemic-related office shakeout [5]

U.S. regional banks' commercial real estate loan books are proving broadly resilient despite worries sparked by a handful of soured loans, but the office sector continues to be a pain point, analysts ... ...

Commercial Real Estate Market Overview - US office loan defaults are nearly 12%, apartment loan defaults doubled in the last year, and $1 trillion of commercial real estate needs refinancing by December [1] - Private equity has assembled a $400 billion war chest for distressed commercial real estate [2] - The American commercial real estate market is worth $207 trillion, exceeding two-thirds of the US Treasury market and America's GDP [10] - $15 trillion in US commercial real estate loans needed to be repaid or refinanced by the end of 2025, later data shows it's closer to $1 trillion [28] Sector Performance - Office sector is in critical condition, retail is facing an identity crisis, industrial is exceeding expectations, and multifamily is watching nervously [9] - Office buildings in San Francisco have lost 70% of their value since 2019 [17] - 46% of securitized multifamily loans maturing by the end of 2025 are insolvent, totaling $473 billion in underwater apartment loans [23] - Total commercial real estate distress hit $116 billion by March 2025, the highest in over a decade and up 23% year-over-year [25] Financial Institutions and Lending - Delinquency rate for office loans hit 117% last month, worse than the 107% peak during the 2008 financial crisis [19] - Small banks with under $20 billion in assets hold 561% of all commercial property loans [32] - 25% of the $15 trillion, approximately $35 billion, will be hard to refinance [33] - Deutsche Fund Brief Bank is exiting the US market, writing off a €41 billion portfolio loss [39] Private Equity and Market Strategies - Private equity's war chest has grown to $400 billion, with 64% targeted at North America [41] - Brookfield raised a record $16 billion distressed real estate fund, deploying $18 billion in Q1 2025 [42]

Company Overview - Ladder Capital Corp (LADR) is a Commercial Real Estate Real Estate Investment Trust (CRE REIT) that has been operating in public markets since 2014 [1] - The company is recognized as one of the better-performing CRE REITs, focusing on the middle market niche [1] Investment Strategy - Binary Tree Analytics (BTA) aims to provide transparency and analytics regarding capital markets instruments and trades, with a focus on Closed-End Funds (CEFs), Exchange-Traded Funds (ETFs), and Special Situations [1] - BTA's objective is to deliver high annualized returns while maintaining a low volatility profile [1] Experience and Background - The investment team has over 20 years of experience in the industry, with a background in finance from a top university [1]

Investment Ratings - CBRE Group, Inc: Overweight; Price Target: $143.00 [16] - Colliers International Group Inc.: Neutral; Price Target: $137.00 [21] - Cushman & Wakefield: Neutral; Price Target: $13.00 [25] - Jones Lang LaSalle Inc: Overweight; Price Target: $285.00 [29] Core Insights - The report indicates an overall positive outlook for the commercial real estate (CRE) services sector, with revenue forecasts for 2025 showing an average increase of 3%, leading to a projected 9% year-over-year growth [1] - The earnings before interest, taxes, depreciation, and amortization (EBITDA) estimates have been revised upward by 4%, indicating a 12% year-over-year growth, while earnings per share (EPS) estimates have increased by 7%, reflecting a 19% year-over-year growth [1] - The report highlights that the estimates have fluctuated over the past six months due to various macroeconomic factors, but recent strong earnings results have led to a renewed optimism in the sector [2][3] Company Summaries CBRE Group, Inc - CBRE is recognized as the largest global provider of CRE services, with a strong track record in capital allocation and organic growth [16] - The company is expected to achieve a compelling earnings growth of 19% in 2025, outperforming asset-heavy landlords and the broader equity market [4] - CBRE's valuation is attractive, trading at 19.8x 2025 EPS, which is below the S&P 500 average of 22.2x [5][17] Colliers International Group Inc. (CIGI) - CIGI is the third largest global CRE services platform, with a brokerage incremental margin of approximately 20%, which is lower than its peers [21] - The company has been actively acquiring businesses, averaging over $300 million per year, and is investing in investment management and engineering acquisitions [21] - CIGI trades at 18.8x 2025 EPS, slightly below CBRE but above CWK [22] Cushman & Wakefield (CWK) - CWK is positioned to benefit from the institutionalization of real estate investing, although it faces challenges due to its higher leverage [25] - The company is expected to improve margins as it scales, but specific risks remain that could impact its performance [25] - CWK trades at a low valuation of 8.4x 2025 EPS, indicating potential upside if it can manage its leverage effectively [26] Jones Lang LaSalle Inc. (JLL) - JLL is the second largest commercial real estate services platform globally, with a competitive EBITDA margin of 14.8% [29] - The company is well-positioned for growth, particularly with expectations of a rebound in capital markets [29] - JLL trades at 12.9x 2025 EPS, which is attractive compared to its peers, and maintains a price target of $285.00 [30][31]