Commercial Real Estate Is Back: What California Investors Should Know

Commercial mortgage originations jumped 16% in Q2, with office financing showing signs of a long-awaited recovery. Here's why California investors should be paying attention.

For the past few years, commercial real estate — especially office properties — has been the sector everyone loved to write off. But the latest data tells a different story: commercial mortgage originations surged 16% in the second quarter, led by CMBS lending and banks stepping back into the market in a meaningful way. Perhaps most notably, office financing is showing signs of a genuine comeback.

What does this mean for California investors? Quite a bit. California's major metros — Los Angeles, San Francisco, San Diego, and the broader Bay Area — all have significant commercial real estate activity. As lenders grow more willing to finance commercial deals again, that opens doors for investors who have been waiting on the sidelines.

Multifamily, mixed-use, and even select office assets in strong submarkets are worth a fresh look. The key is identifying properties where the fundamentals are solid: strong rental demand, quality tenants, and locations with economic staying power.

The lending landscape for commercial deals is also evolving. Debt service coverage ratios, LTV requirements, and loan structures look different today than they did two years ago — and working with a broker who specializes in commercial lending can make all the difference in getting your deal funded on favorable terms.

Thinking about your next investment property? Let's talk. We work with a wide range of commercial lenders and can help you find the right financing structure for your goals.