Bloomberg Intelligence Sep 16, 2026
With Laura Rapaport, founder and chief executive of North Bridge
There is a trillion dollars of commercial real estate debt coming due, and Laura Rapaport says some of those loans were written when the 10-year Treasury yield was as much as 500 basis points below where it sits now.
Banks have come back to the market, but only for certain buildings. Well-leased apartment blocks and well-leased industrial get liquidity; anything unstabilized, delayed or over budget does not.
"So you have a tale of have and have nots in terms of the deals that will be able to be refinanced and those that will not."
Rapaport founded and runs North Bridge, which lends into exactly that gap through CPACE — a form of finance repaid through a real estate tax assessment rather than a mortgage.
The full segment is covered here so you can skip it.
Here are the 5 takeaways that matter.
Key Takeaways
$1T of commercial property debt is maturing, some of it written up to 500bps below today's 10-year yield
Bank liquidity is back only for well-leased apartments and industrial buildings
A higher SOFR means more equity per deal, so fewer projects start
CPACE is repaid through a real estate tax assessment, not a mortgage
New York City started 74 office-to-residential conversions this year, 10,000 units, a third of its new housing starts
1. A $1T Maturity Wall
Rapaport was asked what a rate rise means for commercial real estate. She named two problems: refinancing and construction.
A trillion dollars of commercial real estate debt is maturing
One, in terms of the wall of maturities, there's a trillion dollars of commercial real estate debt that is maturing.
Laura Rapaport
Those loans were written up to 500 basis points below today's 10-year
And these deals were done in an environment that was sometimes 500 basis points inside of where we are today for the 10 year.
Laura Rapaport
Some of them get refinanced and some do not
So you have a tale of have and have nots in terms of the deals that will be able to be refinanced and those that will not.
Laura Rapaport
Bank money came back only for the best-leased buildings
Fortunately, Banks have come back in terms of injecting more liquidity into the CRE market, but that's very much concentrated into certain asset classes like well-leased multifamily, well-leased industrial.
Laura Rapaport
The buildings that need help most are the ones banks skip
And so other projects that may not be stabilized yet that have had cost overruns and delays or are not in favor are going to have a really hard time refinancing. And so private credit is going to have to be really creative.
Laura Rapaport
2. Fewer Projects Start
The second effect is on new supply. She framed it as a squeeze on the equity in a deal, not only on the debt.
Construction starts take the second hit
The other way this impacts the real estate industry is in construction starts.
Laura Rapaport
The market was already short of buildings
We have a very supply constrained market in certain asset classes, especially multifamily.
Laura Rapaport
A higher SOFR means more equity per deal
And with a higher price of SOFR and higher start financing costs, lack of liquidity, more equity is going to be needed to inject into these deals.
Laura Rapaport
Build costs rise at the same time, so fewer projects begin
So fewer projects are going to get started.
Laura Rapaport
The ones that do start use unusual structures
Those that do get started will have very creative capital stacks.
Laura Rapaport
3. What CPACE Actually Is
A host asked her to explain CPACE again. She gave the product and the repayment separately.
CPACE covers refinancing, rescue capital and new construction
CPACE is Long-Term Sustainable Finance. that can be used for refi and rescue capital, as well as new construction.
Laura Rapaport
It works by lowering the blended cost of the whole capital stack
What we do is we help borrowers get access to total proceeds by bringing down the overall cost of capital. So we are an assessment, not a mortgage.
Laura Rapaport
Repayment runs through the property tax bill
No, so our financing actually is very passive. Our payment is through a real estate tax. So it's an assessment.
Laura Rapaport
On new construction it takes a borrower to 70% or 80% leverage
to provide borrowers the much-needed proceeds at that 70%, 80% leverage amount, but at a lower overall blend in cost of capital, which is very attractive for people trying to start projects.
Laura Rapaport
4. 74 Conversions in NYC
A host raised office-to-residential conversions, after part of a building under conversion collapsed. Rapaport was in the area that morning; North Bridge is not involved in that project.
New York started 74 conversions this year, a third of its new housing
And there are 74 starts this year alone in New York City, which represents 10,000 units, which is a third of new housing starts. And there's 122 projects in New York City going on right now.
Laura Rapaport
Manhattan cannot build new fast enough
This is a newer trend and one that I think we'll see and continue to grow because New York City is very supply constrained, especially Manhattan, for new construction projects.
Laura Rapaport
Conversions add affordable and market-rate housing
And so this is a very effective way to create housing stock, not only affordable, but also market rate housing that's much needed.
Laura Rapaport
5. Conversion Economics
Asked what returns conversions produce, she separated the cost advantage of converting from the cost of financing it.
A higher cost of capital cuts the profit
The cost of capital has increased, which really reduces the overall profitability of projects.
Laura Rapaport
The expensive part of a conversion is already built
One of the things that makes a conversion interesting is that the building's already built.
Laura Rapaport
They are not easier than new construction
Conversions are actually very complicated, sometimes far more complicated to build than new construction.
Laura Rapaport
Inputs and labour cost more as well
The inputs, the labor, the raw materials going into it is going to be more expensive.
Laura Rapaport
Bonus Insights
The decision hinged on the press conference, not the increase itself
The big question is what Kevin Warsh says at 2.30 p.m. and how that shapes people’s perceptions of where the central bank goes next.
Where the office-to-residential question came from
We’re here in Midtown Manhattan, so I feel like we need to ask you about this trend of converting office buildings into residential buildings.
A cap rate is net operating income over the value of the property
The definition was given on air after a host asked for it.
Rapaport's bottom line is that higher rates hit commercial real estate twice — a trillion dollars of maturing loans written at rates hundreds of basis points lower, and a construction market where more equity is now needed per project — and that the money filling both gaps is coming from private credit and from structures such as CPACE that sit outside the mortgage.
Products, Companies & Tools Mentioned
North Bridge (Her firm, which provides CPACE financing for refinancings, rescue capital and new construction, repaid through a real estate tax assessment rather than a mortgage)
Other segments in this episode
Matthew Bloxham, Bloomberg Intelligence, on the AI slowdown letter
Mandeep Singh, Bloomberg Intelligence, on enterprise token budgets
Adam Grant, BloombergNEF, on robotaxis no longer being science projects
Listen to the full interview
🟣 Apple Podcasts | 🔗 Episode page
If this was worth your time, send it to someone closer to the industry than you are.
Get the latest market chatter as it happens: