From Coast to Coast, CRE Financing Shifts With Office Comeback and Technology

KeyCrew Media
Thursday, September 25, 2025 at 9:52am UTC

The commercial real estate financing landscape is undergoing significant changes, with office properties showing renewed strength and technology bringing new efficiencies to the industry. Abraham Bergman, president of Eastern Union Funding, offers insights from more than two decades in mortgage brokerage, with experience across 42 states and a broad range of transactions.

From Modest Beginnings to National Reach

Bergman’s career began in 2001 when he and Ira Zlotowitz left their previous brokerage roles to launch Eastern Union. “We started off as a small shop in borrowed space from his dad’s book publishing building. We were right next door to the bindery, so it was noisier than this airport lounge,” Bergman recalls.

The company expanded steadily, relying on long-term relationships as its foundation. “We still have some sales people that are with us from way back when, and we have people that have been here for 10, 15 years,” he notes. This stability underscores Eastern Union’s commitment to a customer-first approach, which Bergman credits for building lasting brand loyalty in a relationship-driven industry.

Technology’s Expanding Role in Brokerage

Recognizing the growing importance of technology in commercial real estate, Eastern Union recently spun off GParentSee, a service offering fixed-fee deal packaging. While Eastern Union continues to operate on traditional success fees, GParentSee provides an option for clients who want deal preparation but prefer to handle negotiations themselves.

A major technological effort is AveryGPT, a collaboration between both companies and 30 real estate owners. “We are building what we’re calling AveryGPT, which is ChatGPT for commercial mortgages,” Bergman explains. The system aims for comprehensive memory recall for deal tracking and includes an AI Rolodex of service providers.

“It’s really that idea of taking that old Rolodex and bringing it up to 2025 where you can teach it, and it’s not just the yellow pages anymore,” he says. The platform will eventually link with major AI search engines, creating a broad marketplace for commercial real estate services.

Office Space Shows Signs of Recovery

Notably, Bergman reports that office properties are regaining interest after years of being avoided by lenders. “We are actually seeing office deals starting to happen,” he says, though challenges persist.

Recovery is uneven across markets. Suburban office properties are performing particularly well. “The suburban office market will have benefited in a weird way from COVID, because not everybody has to be in downtown,” Bergman observes. “You don’t have to work in downtown Manhattan or Chicago. You can work from suburban New Jersey, Brooklyn, or Long Island.”

His own Brooklyn office illustrates this trend. Located in Marine Park’s residential section, the area has seen new office buildings lease successfully at $45-55 per square foot. “For the most part, they’re leasing phenomenally well,” he notes.

Market Dynamics and Capital Flows

Despite improvements, transaction volume is still well below typical levels. “The number of transactions going on in the market is a mere fraction of what a normal market was,” Bergman says, referencing activity before 2022.

Interest rates remain the main constraint, though Bergman points out that commercial borrowing costs are not directly tied to Federal Reserve moves. “A lot of people are very focused on what the Fed is doing, but ultimately, what makes a difference to commercial real estate owners is what it’s going to cost them to borrow money when they go to the bank,” he explains. “That’s not 100% tied to the Fed rate.”

Recent weeks have seen modest rate improvements, sparking some increased activity. However, refinancing remains limited, as few borrowers want to take on higher rates unless their loans are maturing.

Changing Lender Landscape

Debt funds have become the most active capital providers, especially for more complicated deals. “Debt funds are very active in the market,” Bergman reports. “They’re willing to perhaps do a more structured deal than the banks and life companies.”

Traditional lenders, banks and life insurance companies, have returned to the market but remain cautious. They are not pursuing aggressive lending targets and instead focus on careful underwriting and select submarkets.

Geographic selectivity is now key. “Nobody’s painting with a broad stroke. Everybody’s looking at things very carefully,” Bergman notes. Even strong markets like Austin have seen unexpected rental declines and rising vacancies, making lenders cautious about broad generalizations.

Creative Deal Structures Gaining Traction

Recent deals highlight how current market conditions are enabling structures that were previously rare. Bergman describes closing several transactions where existing lenders offered discounted payoffs to borrowers who were not in default but faced refinancing challenges due to higher rates.

“The lender recognized that there’s no way for them to refinance at that current debt level,” he explains. “So it’s either give some sort of discount, extend the loan, or end up with a deal in default.” These discounted payoffs were financed by traditional banks rather than higher-rate bridge lenders.

Another recent example involved a mixed-use development in Florida with residential, retail, and office space. “Two years ago, that would have been challenging with the office component,” Bergman notes, crediting Florida’s population growth for making the deal attractive to multiple lenders.

Strategic Advice for Investors

For institutional investors, Bergman stresses the importance of flexibility. “Get a flexible prepayment penalty, because I believe interest rates are going to come down, and you’re not going to want to be locked into a deal,” he advises.

He cautions against giving up long-term flexibility for small rate savings: “You really want to save yourself a quarter point in the rate, but then be locked into a deal that you won’t be able to get out of.”

Geographic diversification is essential, but Bergman underscores the value of deep local knowledge. He shares advice from a longtime client: spend weekends at prospective properties to understand neighborhood dynamics that aren’t apparent during business hours.

“Saturday night at a property looks different than Monday night,” he explains. “You can only know that if you spend time at the property.”

Regulatory Hurdles

Rent control and stabilization laws continue to present obstacles, especially in places like New York. “Not a day goes by that I don’t get a comment from a lender that they’re going to be ultra-cautious on affordable housing deals because they know the challenges owners are facing,” Bergman reports.

These regulatory issues make lenders hesitant to finance certain property types, causing distortions in capital flows and affecting property values.

Looking Ahead

Despite obstacles, Bergman remains optimistic about the long-term outlook for commercial real estate. Sectors like industrial and self-storage continue attracting investment, and mobile home parks are seen as especially appealing assets.

The future of the industry will be shaped by the integration of technology with traditional relationship-based business models. As Bergman puts it, “We don’t believe humans are ever going to be replaced. There will always be a place for human beings, but certain components can be automated and have a lot more knowledge.”

For Eastern Union, success depends on the same principles that have guided the company from the start: honesty, relationship-building, and deep market expertise. “In the long run, you always sell more if you just say it the way it is,” Bergman concludes. “Just be honest, be true. You make a mistake, say it.”

This straightforward approach has built enduring partnerships that extend beyond business transactions, as clients invite Bergman to personal events like their children’s weddings, reflecting the personal relationships that remain central to commercial real estate success.