Tag Archives: DealStructuring

2026 CRE Refinancing: Why Capital Availability Is No Longer Enough

by: Jack Moskow

Entering 2026, capital has returned to commercial real estate, but it is being deployed much more selectively than in prior cycles. Banks, life insurance companies, agencies, and private credit lenders are still active, yet the market is no longer rewarding broad risk-taking the way it did when rates were near historic lows. Today, lenders are focused on asset quality, sponsorship strength, income durability, and the borrower’s ability to support the capital stack under current underwriting standards. In this environment, the issue is not simply whether liquidity exists. The real question is whether a property’s basis and structure can support a refinance or transaction.

For many owners and developers, this has changed the financing conversation. A few years ago, borrowers could often focus mainly on pricing, proceeds, and execution speed. Now, the conversation is shifting from “What’s the rate?” to “How do we rebuild the capital stack?” Higher borrowing costs, with stabilized assets still seeing rates in roughly the 5.5%–6% range combined with lower valuations and more conservative lender sizing, have made structure just as important as liquidity. Even if capital is available, it may not be available at the leverage level needed to refinance an existing loan or support the original acquisition basis.

Liquidity is available, but it is selective.Stabilized multifamily, industrial, and grocery-anchored retail assets with strong cash flow continue to attract lender interest. Experienced sponsors with proven track records are also better positioned to access capital. However, assets with weaker fundamentals, uncertain leasing, or business plans that depend heavily on future rent growth are facing more scrutiny.

The bigger challenge is the refinancing gap created by loans originated during the low-rate environment. Between 2019 and 2022, many properties were financed at 70–75% loan-to-value, often with interest rates below 4%. As those loans mature, borrowers are now facing a very different lending environment.

Today, lenders are sizing closer to 50–60% loan-to-value placing more weight on debt yield, debt service coverage, and downside protection. As a result, new senior loan proceeds may fall well short of the existing debt balance.

That gap can create serious pressure for owners. A property may still be performing, but if the new senior loan cannot cover the maturing debt, the sponsor must find additional capital. In many cases, senior debt alone is no longer enough. This is where capital stack restructuring becomes essential. Mezzanine debt, preferred equity, joint venture equity, and other structured solutions can help bridge the gap between lender proceeds and the asset’s existing basis.

For owners who still believe in the long-term value of their assets, this type of structuring can be the difference between preserving ownership and being forced to sell at an unfavorable time. Layered capital can provide flexibility, help complete a refinance, and allow sponsors to hold through a difficult part of the cycle. However, these solutions need to be structured carefully. The wrong capital partner or an overly expensive structure can create new problems instead of solving the original one.

Lever Capital Partners helps sponsors navigate this environment by identifying the right financing solution for each asset and situation. In a market where basis increasingly determines liquidity, Lever works with borrowers to assess the gap, evaluate available capital sources, and structure the appropriate mix of senior debt, mezzanine financing, and preferred equity.

By leveraging relationships across banks, life insurance companies, agencies, and private credit lenders, Lever Capital Partners helps clients access capital that fits today’s underwriting standards. The goal is not just to find a loan, but to build a capital stack that can close, support the asset, and preserve long-term value. In 2026, surviving the refinancing cycle will depend less on whether capital exists and more on whether sponsors can structure around today’s reality. 

When a CRE Loan Matures and the Refinance Doesn’t Clear the Existing Debt

by: Adam Horowitz

Most borrowers coming into maturity today expected to refinance. What they’re realizing is that the refinance doesn’t clear the loan.

Across the deals we’re seeing, it’s not a question of whether debt is available. It’s that the new loan is coming in materially below the existing balance. That gap is what’s driving decisions right now.

According to industry data from groups like the Mortgage Bankers Association and Trepp, over $1.5 trillion of U.S. commercial real estate debt is maturing between 2025 and 2027. Much of that was originated in a very different environment. That’s the backdrop for what’s happening today. In this environment, working with us at Lever Capital Partners can help borrowers understand where their deal actually stands and what options are realistically on the table.

This Isn’t a Rate Problem, It’s a Proceeds Problem

Higher rates are part of the story, but they’re not the core issue.

What has changed more meaningfully is how loans are being sized. Lenders are underwriting to higher debt yields, lower leverage, and actual in-place cash flow. There is less reliance on projected growth, and more emphasis on where the deal stands today.

The result is straightforward. Even when a property is performing, it often doesn’t support the same loan proceeds it did a few years ago. We are consistently seeing situations where the new loan comes in 10 to 25 percent below the existing balance. That is where deals start to break.

This is not a liquidity issue. Capital is still there. It is a structure issue.

A Lot of These Deals Only Worked in One Environment

Many of the loans coming due today were structured between 2020 and 2022, when leverage was higher, rates were lower, and underwriting gave more credit to future rent growth.

Take those assumptions away, and the structure does not hold the same way.

That does not mean the asset failed. In many cases, the property is stable and performing. The issue is that the original capital stack was built around conditions that no longer exist.

Where the Pressure Shows Up

The pressure point is simple. The existing loan balance is higher than what the market will refinance today.

That gap forces decisions.

In some cases, it is driven purely by leverage. In others, it is a combination of rate movement, flat values, and underwriting discipline. For deals that were already thinly capitalized, there is very little room to absorb that shift.

What we are seeing more frequently is that sponsors are not dealing with an operational problem. They are dealing with a capital structure that no longer works.

What Sponsors Are Actually Doing

At this point, most borrowers are not choosing between ideal outcomes. They are choosing how to manage the gap.

Some are writing checks to complete a cash-in refinance and protect their basis. Others are bringing in preferred equity or mezzanine capital, not as an optimization, but as a way to get the deal closed. That comes with a higher cost of capital and a different risk profile.

There are also situations where the numbers simply do not justify putting more money into the deal. In those cases, the conversation shifts toward a recapitalization, a sale, or stepping away entirely.

There is no clean solution once the gap shows up. There are only trade-offs.

What Lenders Are Actually Doing

Lenders are still active, but the approach is more disciplined.

They are sizing to current performance, not future expectations. They are more focused on downside protection, and less willing to stretch to make a deal fit a prior capital structure. Extensions are happening, but they are no longer automatic and almost always come with conditions.

The assumption that every loan refinances has been removed from the market.

What This Looks Like in Practice

A deal financed in 2021 at around 70 percent leverage reaches maturity today. Under current underwriting, that same asset might support something closer to the mid-50s to low-60s range, depending on the asset and market.

That difference creates the gap.

At that point, the borrower is not deciding whether to refinance. They are deciding how to solve the shortfall, whether that means adding capital, restructuring the deal, or exiting.

What Matters Now

The sponsors navigating this best are the ones getting in front of it early.

That means running realistic refinance scenarios, understanding where proceeds will land, and identifying the gap before time becomes a constraint. The biggest mistake we see is treating maturity like a formality instead of what it has become, which is a capital event.

This is where we typically come in, helping sponsors quantify that gap, understand how lenders are actually sizing deals today, and structure solutions that reflect current market conditions rather than past assumptions.

Final Thought

Loan maturity used to be routine.

Today, it is where the capital stack gets exposed.

The deals that get through this cycle are not the ones with the best story. They are the ones where the structure works under today’s constraints.