PERE News
Sep 18, 2025
Robust corporate bond issuance since the start of September is having a positive knock-on effect for commercial real estate lending.
There was $60 billion of new issuance in the first week of September,
with a similarly active pipeline ahead. BlackRock’s Global Credit weekly
cited two factors driving this high level of issuance.
“Investor demand for new corporate credit has been supported by all-
in yields which remain attractive by historical standards. This is
especially visible in the USD [investment-grade] market, where the
tenor and rating composition has also been shifting,” wrote Amanda
Lynam, head of macro credit research at BlackRock.
While the issuance has been driven by non-real estate corporations,
the surge demonstrates strong investor demand and favorable market
conditions for corporate borrowing, even in a high-interest-rate
environment, said Jim Dillavou, principal and co-founder of California-
based retail development Paragon Commercial Group.
“There are two ways the commercial real estate will interpret this data,”
Dillavou said. “The knee-jerk reaction will be that high bond yields
historically correlate to high borrowing costs and higher cap rates, bothof which create industry headwinds.”