Beeville Independent School District (BISD) in Beeville, Texas, in collaboration with Pfluger Architects and Spawglass General Contractors, recently commenced construction on a new elementary school designed to consolidate two aging schools into one modern campus.

Following years of planning, bond proposals, and the approval of a $62 million bond by voters in Spring 2024, the new Beeville Elementary School will serve 1,200 students when it opens in August 2026.

Designed by Pfluger Architects, this campus marks the beginning of a long-awaited transformation for the district, creating a modern, fully enclosed facility designed to foster creativity and collaboration. The new 108,100-square-foot Beeville Elementary School at 1799 N. Fenner Street will replace the current Fadden-McKeown-Chambliss (FMC) and R.A. Hall Elementary Schools, both of which have served the community for over five decades. In addition to indoor classrooms and collaboration spaces, the campus will include 51,000 square feet of outdoor learning and natural play areas.

Pfluger Architects worked closely with Beeville ISD and the district’s Community Advisory Committee – a group of parents, teachers, administrators, and community members – in the bond planning process. Together, they asked big questions about enrollment growth, safety, and facility conditions and built a plan that reflects the community’s priorities.

The new facility offers Beeville students advanced learning spaces and state-of-the-art technology in a completely enclosed, secure environment, with designated learning hubs and collaborative spaces designed to enhance the educational experience. Once the new campus is completed in August 2026, R.A. Hall Elementary will be demolished and FMC Elementary will be repurposed for other district educational uses.

Leasing activity remained sluggish in the U.S. office market, while vacancy rates continued to rise in the first quarter of the year, according to the latest research from JLL.

JLL’s first quarter U.S. office report didn’t contain much in the way of surprises: The U.S. office market continues to struggle as companies seek smaller amounts of space and workers continue to work from home at least on a part-time basis.

According to JLL, office leasing volume in the United States during the last 12 months stood at just 89% of what this sector would typically see during a 12-month span before the COVID pandemic.

In a bit of good news, though, leasing volume did increase in the first quarter, with JLL reporting that the United States saw 50.4 million square feet of closed office leases during the first three months of the year. That is up 15.3% from the first quarter of 2024.

The higher leasing volume did not translate to a drop in vacancy rates, though. JLL said that the U.S. office sector posted 8.1 million square feet of negative net absorption in the first quarter of the year.

The loss in occupancy was elevated by federal lease terminations, federal contractor sublease additions and buildings removed for conversion that had space leased before removal.

Even these negative numbers were an improvement from the first quarter of 2024, when the U.S. office sector saw negative net absorption of more than 20 million square feet.

The U.S. office market total vacancy rate jumped by 34 basis points on quarter-over-quarter basis, hitting 22.64% in the first quarter, JLL reported.

Is there positive news? A bit. JLL predicted that net absorption is expected to stabilize during the remainder of the year. JLL also said that it expects vacancy rates to plateau and eventually decline.

This is partly because downsizing activity has lessened during the past year, with larger tenants trimming just 6.6% of their space once their office leases expire. With an increase in expansionary leases expected to hit the office sector throughout the rest of this year, JLL says, both absorption and vacancy rates should begin to improve in the second half of 2025.

In another key trend, JLL reported that the average number of days a week that employees at Fortune 100 companies are required to work in the office now stands at 3.74 days. That is up from 2.2 days in the fourth quarter of 2024.

Office investment volume also rose to $11 billion in the first quarter, according to JLL.

Anthem Development capitalized the development of a 256-unit Class-A luxury multifamily community at the intersection of I-35 and Justin Road in the Dallas suburb of Lewisville, Texas.

The institutional joint venture will break ground in May 2025 with completion scheduled within 24 months.

Anthem Village will comprise four four-story, elevator-serviced buildings, offering a diverse mix of thoughtfully designed residences. 

Residents will enjoy direct access to a host of nearby amenities, including Lake Lewisville, Old Town Lewisville, and the Lake Park Athletic Fields and Golf Course. Situated on I-35, the community’s strategic location also ensures convenient commutes to major employment areas throughout the Dallas-Fort Worth metroplex without disrupting neighborhood traffic.

Jorg Mast of Colliers International represented Anthem and arranged the financing and joint venture common equity that will be used for the acquisition and development.

Merriman Anderson Architects is serving as architect for the dual-branded hotel development that recently broke ground in Uptown Dallas featuring Marriott brands AC Hotel and Moxy Hotel. 

The 19-story tower includes a total of 264 rooms, modern amenities, and unique, complementary experiences for guests. The development’s address is 2910 N. Hall St. in the prime location of the McKinney Avenue corridor in Uptown Dallas, where there are endless restaurant and nightlife options. 

There are 110 rooms planned for the AC Hotel, and 154 rooms within the Moxy Hotel. Each hotel will have its own lobby and entrance but will share amenities such as a fitness center and a 261-stall parking garage. The signature Moxy Bar and Restaurant will be situated at street level, and a custom-branded bar and lounge will be located on the 8th floor, featuring an outdoor terrace deck, water features, and spectacular city views. 

The development is projected to be open in summer 2026. 

Peachtree Group is the owner of the development, and Phoenix Development Partners is the developer for the project. Moss Construction is the general contractor, and The Society is the interior designer. 

As commercial real estate is still finding its footing following the pandemic, the lending landscape continues to shift. Traditional lenders are maintaining a conservative approach, as they balance tight regulations, ongoing liquidity challenges, and sector uncertainty alongside borrowers.

As banks, insurance companies, and other large financial institutions assess their exposure to commercial real estate, private credit providers have complemented the established debt sponsors by offering flexible and efficient solutions to borrowers. With many projections suggesting that over the next five years the global private credit market could triple, borrowers will benefit from a competitive lending marketplace between both traditional and private lenders.

There are several opportunities, risks, and predictions for both borrowers and lenders when considering private credit in U.S. commercial real estate lending in 2025.

Efficiency Creates Opportunity

The lack of regulatory oversight and more structured internal controls allow private lenders to act quickly and nimbly. Fewer committees and administrative scrutiny provide borrowers with increased certainty that their deals will get done as quickly as needed. Private lenders can originate loans, secured by valuable collateral, while offering more flexible terms, albeit higher interest rates, to borrowers compared to more traditional bank loans.

Maturing Loan Environment

Industry experts estimate that approximately $1 trillion in commercial real estate loans are set to mature by the end of 2026. Many of these loans were originated during periods of historically low interest rates, leaving borrowers at an important inflection point as they look to refinance. The rapid rise in interest rates over the last few years has led to the repricing of assets, with existing lenders looking at significantly impacted property valuations now versus when the deal was underwritten. These factors have led to a funding gap that private lenders are uniquely positioned to fill, often on terms that better reflect current market conditions.

While borrowers may look to private credit to originate new loans, many borrowers with quality cash-flowing assets and maturing loans can also negotiate a loan extension with their existing lenders and use private credit as a complementary tool. Borrowers can look to the private market for new subordinate capital. This capital can be used for the additional equity required by the existing lender, can facilitate new interest rate cap purchases, may replenish the interest reserve for the senior loan, or cover other financing closing costs.

Investor Appetite and Borrower Opportunity

Given inflation concerns over the last few years, many investors have stayed on the sidelines and accumulated cash waiting for the right time to deploy it. With the tempering of inflation and a reset in valuations across commercial real estate, private credit lenders see this as an opportunity to achieve higher yields in the real estate market, with loans that can be structured for a relatively short duration. From a borrower’s standpoint, having several potential private lenders with “dry powder” creates a good marketplace to shop around and negotiate terms.

Risks Associated with Private Credit

While the influx of capital from private lenders opens new opportunities, it also introduces additional considerations for both borrowers and lenders. Borrowers may face increased pressure due to higher interest rates, as private credit loans often come with relatively high spreads. With the ongoing uncertainty in valuations, it’s crucial for borrowers to carefully analyze the collateral and assess potential deal and market risks. Should borrowers have issues satisfying debt service, for example, private lenders may be less patient and willing to work with borrowers than traditional lenders.

On the lender side, lower levels of regulatory oversight in private credit can be advantageous, but they also necessitate rigorous due diligence and thorough creditworthiness evaluations to mitigate potential risks. A strong understanding of how a borrower is capitalized for a particular deal is key. Once the loan is closed, the lender will need to remain actively engaged, monitoring covenants and continuing dialogue with borrowers to get ahead of potential issues.

Office and Multifamily Outlook

As we look across real estate sectors, the office market, most notably, is in a state of flux. Driven by evolving work patterns and changing tenant expectations, many legacy office buildings now require significant repositioning. Private credit can serve as a short-term option for borrowers in need of refinancing existing office buildings, an asset class many traditional lenders may be weary of in the current market. Borrowers looking to finance projects that involve necessary capital improvements to drive occupancy, adaptive reuse, modernization, or even conversion to mixed-use developments can lean on private credit as an option while developing creative solutions to inject value into existing office buildings.

Turning to multifamily, the market has seen a construction boom over the last several years, highlighted by more than 580,000 units being completed in the U.S. in 2024 according to Colliers, the most since 1974. With a significant number of construction loans maturing, there is an opportunity for private capital to step in as a financing source, particularly as developers continue to lease up completed projects, which in turn leads to stabilization and greater potential to refinance the asset with a traditional lender.

Interest Rate Environment

With recent news suggesting that the Federal Reserve may not cut rates as many times as previously expected in 2025, rates are likely to remain higher than in the last market cycle. Traditional lenders are more likely to wait out additional rate cuts before redeploying capital, creating an ideal environment for private credit lenders to invest in cash flowing assets, capitalizing on trillions in maturing loans and a reset in valuations.

Conclusion and Key Takeaways

Private credit is poised to play a big role in the commercial lending space over the next five years, creating a favorable market for borrowers. These key factors will drive that opportunity as we move through the next real estate cycle:

• Approximately $1 trillion in commercial real estate loans are set to mature by the end of 2026, creating significant demand for refinancing options at a time when higher interest rates have impacted property valuations.
• Private credit can serve as complementary capital for borrowers with quality assets who secure loan extensions from their existing lenders, providing funds for additional equity requirements or other financing needs.
• The office market presents unique opportunities for private lenders as traditional lenders scale back investment in this sector.
• With the Federal Reserve calling for fewer interest rate cuts in 2025, private credit lenders are well-positioned to capitalize on higher yields while traditional lenders remain conservative.

Courtney Mayster is the Managing Partner at Much Shelist, P.C. and a seasoned commercial real estate attorney with projects ranging from acquisitions and dispositions to financings and developments. Ian Shaffer is an associate at Much who counsels buyers, sellers, investors, landlords, tenants, and lending institutions on commercial transactions.

Byline Bank’s Commercial Real Estate Group closed on a $23.5 million loan with Campus Realty Advisors and T2 Capital. The transaction funds the acquisition, renovation and repositioning of The Edge Student Housing, a 173-unit, 553-bed purpose-built student housing community at 1740 Old Ranch Road near Texas State University in San Marcos, Texas.

This is the second deal between Byline, Campus Realty Advisors and T2 Capital in the last 12 months: In July 2024, Byline funded a $15.2 million loan for another 152-unit, 488-bed student housing community in San Marcos.

Conveniently located close to the Texas State campus, The Edge Student Housing features a variety of amenities, including a pool, volleyball and basketball courts, a fitness center, and access to nearby hiking trails. Campus Realty Advisors and T2 Capital plan to make significant capital improvements to each unit, as well as to the building’s common areas and amenities.

Upgrades in individual apartment units will include new plank hardwood floors, new cabinet pulls, updated bathroom fixtures, and modern paneled interior doors with updated hardware. The building’s clubhouse will be renovated and reconfigured to include an expanded, commercial-style fitness center with all-new equipment, improved study areas, a new community gathering area, and an updated leasing center. Outdoors, a kitchen, a firepit and new lounge furniture will be added to the pool area along with LED light fixtures and upgrades to the complex’s HVAC and water heating systems.

As one of the closest properties to the University campus in the Northern student housing submarket, the planned upgrades to The Edge Student Housing will help accommodate the rapidly growing number of enrolled Texas State students. According to data from the University, 40,678 students enrolled in Fall 2024, an increase of 5% year-over-year and a significant milestone for Texas State that includes record high enrollment among graduate, doctoral and international students.

The deal closed in February 2025, and improvements on the property are expected to be completed ahead of the 2025-2026 school year. Campus Realty Advisors and T2 Capital were represented in this transaction by the law firm Smith Gambrell Russell, while Byline Bank was represented by Holland & Knight.