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.
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Here are the 5 takeaways that matter.
👤 Guest: Laura Rapaport, Founder and CEO of North Bridge, which provides CPACE financing for commercial real estate refinancings, rescue capital and new construction
🎙️ Hosts: Paul Sweeney and Scarlet Fu, who anchor Bloomberg Intelligence from Bloomberg's Interactive Brokers studio in New York
🧩 Other segments: Matthew Bloxham, Senior Tech Media Telecom Analyst at Bloomberg Intelligence; Mandeep Singh, Head of the Technology Research Group at Bloomberg Intelligence; and Adam Grant, Head of Intelligent Mobility at BloombergNEF
📰 Published: 16 September 2026 on the Bloomberg Intelligence feed
🟣 Apple Podcasts | 🔗 Episode page | ⏱️ length not available
Key Takeaways
A trillion dollars of commercial property debt is maturing against loans written up to 500bps below today's 10-year yield Her phrase for the outcome is a tale of haves and have-nots
Bank liquidity has returned but only for well-leased apartments and well-leased industrial buildings
The second effect is on construction starts, where a higher cost of short-term borrowing means more equity is needed per deal
CPACE is repaid through a real estate tax assessment, not a mortgage, which is what makes it passive capital It takes borrowers to 70% or 80% leverage at a lower blended cost
New York City started 74 office-to-residential conversions this year, worth 10,000 units, a third of all new housing starts 122 conversion projects are running in the city at the moment
1. A $1T Maturity Wall
A host set up the segment on the Federal Reserve decision due at 2 p.m. and what the chair would say half an hour later, saying of the increase itself: "I think it's pretty much a no-brainer in terms of what markets are priced in at this point, which is a rate hike." Rapaport was asked what that means for commercial real estate.
The first of the two problems she named is refinancing: "One, in terms of the wall of maturities, there's a trillion dollars of commercial real estate debt that is maturing."
What makes it hard is the rate those loans were written at: "And these deals were done in an environment that was sometimes 500 basis points inside of where we are today for the 10 year."
"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," she said.
Bank capital has returned, but selectively. "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."
The buildings left out are the ones that need help most: "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."
2. Fewer Projects Start
The second effect she described is on new supply, and she framed it as a squeeze on the equity side of the deal rather than only on the debt.
"The other way this impacts the real estate industry is in construction starts," she said.
She starts from a shortage rather than a glut: "We have a very supply constrained market in certain asset classes, especially multifamily," and named office in certain markets and even hotels alongside it.
The arithmetic she gave: "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." SOFR is the benchmark rate that floating-rate construction loans are priced off, so a higher level raises the interest cost of building.
On top of the financing cost comes the build cost — "more inflation, higher inputs, more expensive labor" — and the conclusion follows: "So fewer projects are going to get started."
The projects that do proceed will be financed unusually. "Those that do get started will have very creative capital stacks," she said, and the net effect is a widening gap between supply and demand.
3. What CPACE Actually Is
A host asked her to explain CPACE financing again for anyone who had forgotten, and she gave the mechanics twice, once on the product and once on how it is repaid.
"CPACE is Long-Term Sustainable Finance. that can be used for refi and rescue capital, as well as new construction," she said.
The purpose is 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."
Pressed on whether that makes it debt or equity, she answered on the repayment mechanism: "No, so our financing actually is very passive. Our payment is through a real estate tax. So it's an assessment."
That structure is what lets it sit behind other lenders. It creates "long duration for us to be paid back," she said, and can pay down an existing lender, extend the loan, and give the borrower time to stabilize the building.
On new construction the same logic applies at the top of the stack: North Bridge partners with other lenders "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."
Her own description of where the firm looks: "We're very active looking at projects that have been built that may not yet be stabilized that need a passive liquidity injection."
4. 74 Conversions in NYC
A host raised office-to-residential conversion, noting the trend took a hit earlier in the year when part of a building under conversion collapsed. Rapaport was in the area that morning.
She described being there as it happened: "The morning it was happening, and it was happening real time, which was really terrifying and interesting at the same time." No one was hurt, and she said the project is continuing with a lot of very smart people working on it. North Bridge is not involved.
The numbers she gave for the trend are the sharpest in the segment: "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."
Her reason for expecting it to keep growing is the constraint on building anything new: "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."
"And so this is a very effective way to create housing stock, not only affordable, but also market rate housing that's much needed," she said.
What she expects to change after the collapse is oversight rather than volume: more scrutiny from the city's buildings department, projects potentially taking longer, and fewer firms able to execute them. She added that "there are a number of very talented developers in New York and other markets that can execute these projects."
5. Conversion Economics
Asked what returns these projects produce, Rapaport separated the cost advantage of a conversion from the cost of financing one.
"The cost of capital has increased, which really reduces the overall profitability of projects," she said, and named that afternoon's rate decision as part of the reason.
The advantage a conversion has is that the hardest and most expensive work is already done: "One of the things that makes a conversion interesting is that the building's already built."
She was careful not to call them easy: "Conversions are actually very complicated, sometimes far more complicated to build than new construction." What they avoid is the site and the structure — "you have a foundation and the actual structure of the building, and then it's about changing the asset."
The alternative is worse in Manhattan: buying a site, possibly demolishing what is on it, laying a foundation and building up, "which is really hard to do in Manhattan."
Profitability still gets hit from both sides: "The inputs, the labor, the raw materials going into it is going to be more expensive." Her one offsetting thought is that fewer projects proceeding may eventually ease those input costs.
Bonus Insights
The host who introduced her framed the whole decision around the chair's press conference rather than the increase itself, saying: "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."
The conversion question came with its own framing: "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 host asked on air what a cap rate is. The definition given in the studio was net operating income over the value of the property.
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)
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