Tag Archives: PrivateCredit

$1.8 Trillion of CRE Debt Is Coming Due. Here’s How Deals Are Actually Getting Refinanced in 2026

by: Adam Horowitz

Over $1.5 trillion to $1.8 trillion in U.S. commercial real estate debt is set to mature between 2026 and 2027, according to industry estimates from the Mortgage Bankers Association and Trepp. Much of this debt was originated in a very different environment, characterized by lower interest rates, higher leverage, and more aggressive underwriting. Today, the landscape has shifted. Refinancing is no longer a routine process. It has become one of the most critical strategic decisions sponsors face. In this environment, working with experienced capital advisors like us at Lever Capital Partners can help sponsors navigate changing lender expectations and structure deals that are positioned to close.

This is not simply a rate issue. It is a structural one.

Why Refinancing Is More Difficult Today

Higher interest rates continue to pressure debt service coverage ratios, reducing loan proceeds even for otherwise stable assets. Many loans that were originated in the 3–4% rate environment are now refinancing into 6–8%+ rates, significantly impacting cash flow and loan sizing.

At the same time, lenders are more selective. Leverage levels have come down, credit boxes have tightened, and underwriting assumptions are more conservative.

In many cases, asset values have not kept pace with these changes. As a result, loans that were once comfortably sized at 70–75% loan-to-value are now being underwritten closer to 55–65%. The outcome is a growing disconnect between existing loan balances and what new lenders are willing to provide.

The Refinancing Gap Is Now the Central Challenge

This disconnect has created what many are calling the refinancing gap. Even high-quality assets with strong sponsorship are facing situations where senior debt alone cannot take out the existing loan.

Sponsors are left with a limited set of options. They can contribute additional equity, sell into a potentially unfavorable market, or restructure the capital stack to bridge the difference. Increasingly, the third option is becoming the most practical path forward.

How Deals Are Actually Getting Done

In 2026, refinancing is less about replacing a loan and more about rebuilding the capital stack.

Sponsors are combining senior debt with mezzanine financing or preferred equity to close proceeds gaps. Stretch senior loans and structured debt solutions are also gaining traction, particularly for assets with strong fundamentals but temporary constraints.

For transitional properties, bridge-to-permanent strategies are being used to buy time and improve loan sizing at stabilization.

These approaches reflect a broader shift in the market, where debt funds and alternative lenders now account for a significant share of new CRE lending activity, stepping in where traditional banks have pulled back.

What Lenders Are Prioritizing

Lenders today are focused on durability and downside protection. Strong, stable cash flow remains the primary driver of loan sizing.

Debt yields have moved meaningfully higher, with many lenders targeting 8–10%+ debt yields, reinforcing the shift toward lower leverage and more conservative structures.

Conservative underwriting, realistic business plans, and clear exit strategies are essential.

Sponsor quality also matters more than ever. Liquidity, experience, and the ability to navigate complexity all play into lender confidence. Perhaps most importantly, lenders are prioritizing structure. Deals that are thoughtfully assembled and aligned with current risk parameters are far more likely to close than those chasing maximum leverage.

Execution certainty has become more valuable than headline pricing.

Timing Is Now a Strategic Advantage

In this environment, timing is not just a logistical consideration. It is a strategic one. Sponsors who begin the refinancing process early have more flexibility to explore different capital options and structure the deal appropriately.

Waiting too long often results in limited choices and reactive decisions. In a market where structure determines outcome, time has become one of the most important forms of leverage.

Where Lever Capital Partners Helps

Refinancing today requires more than simply finding a lender. It requires aligning the right mix of capital with the realities of the deal.

At Lever Capital Partners, we work with sponsors to source and structure that capital. By accessing a broad network of banks, life companies, debt funds, mezzanine lenders, and preferred equity providers, Lever helps bridge refinancing gaps and position transactions for execution. Equally important, we translate complex situations into clear, financeable structures that lenders are willing to support.

Refinancing Is Now a Strategy

The upcoming wave of maturities will test even experienced sponsors. The difference between preserving value and losing it will often come down to how well the capital stack is designed.

In today’s market, refinancing is no longer a transaction. It is a strategy.

Industrial and Multifamily Still Dominate, But Here’s Where Real Opportunity Is Hiding in CRE Right Now

by: Adam Horowitz

Industrial and multifamily continue to lead U.S. commercial real estate investment in early 2026. Lenders understand these asset classes, capital is available, and long-term demand drivers remain intact. But as more capital crowds into the same trades, pricing tightens and real opportunity becomes harder to find.

Today, the most compelling opportunities are not disappearing. They are simply hiding in places where capital is more selective, underwriting is more complex, and financing requires a smarter approach. This is where experienced capital advisors like Lever Capital Partners help sponsors navigate complexity, structure the right capital stack, and connect deals with lenders that can actually execute.

Why Industrial and Multifamily Still Attract Capital

Industrial and multifamily remain the default choices for a reason. Both asset classes offer durable demand, relatively predictable cash flow, and deep lender familiarity. Even after several volatile years, lenders are comfortable underwriting these properties, especially in strong markets with experienced sponsors.

That comfort, however, comes with a tradeoff. Competition has increased, leverage has compressed, and investors often face lower upside unless they are buying distressed or operating at scale. For many sponsors, the challenge is no longer finding capital. It is finding returns.

Where Capital Is Quietly Shifting in 2026

As investors look beyond crowded trades, several less obvious sectors are gaining attention.

Last-mile logistics continues to benefit from e-commerce growth and delivery speed expectations. Cold storage is attracting interest as food supply chains and pharmaceutical distribution become more complex. Student housing is seeing renewed demand in supply-constrained university markets, particularly where enrollment remains strong and new construction is limited.

Medical office and life science adjacent assets are also drawing capital, especially properties tied to essential services rather than speculative lab development. Specialized residential strategies, including build-to-rent and workforce housing, are gaining traction as affordability pressures persist across major metros.

These sectors share a common theme. Demand is real, but financing is not straightforward.

The Financing Gap in Non-Traditional Assets

The biggest challenge in these emerging opportunities is not fundamentals. It is capital fit.

Many traditional banks struggle with limited comps, operational complexity, or non-standard lease structures. Debt funds may be interested, but pricing and structure vary widely. Deals often stall because the capital stack does not match the asset’s risk profile, even when the business plan is sound.

In today’s market, strong assets can fail to transact simply because they are paired with the wrong capital source.

What Capital Providers Want to See Now

In 2026, lenders and capital partners are less focused on aggressive projections and more focused on clarity and downside protection.

They want to see a clear operating story, conservative assumptions, and realistic exit planning. Sponsor experience matters, but so does the quality of operating partners. Capital providers are also paying close attention to structure, including reserves, covenants, and how risk is allocated across the stack.

Deals that succeed are designed for lender comfort, not maximum leverage.

How Smart Sponsors Are Getting These Deals Done

Sponsors closing deals in niche sectors are approaching financing strategically. Many are using blended capital stacks, combining senior debt with stretch components or preferred equity. Bridge-to-perm strategies remain common, especially where lease-up or operational improvements are required before stabilization.

Rather than forcing conventional debt onto unconventional assets, these sponsors are using structure to reduce perceived risk and increase execution certainty.

This is where experienced capital advisory becomes critical. Firms like Lever Capital Partners help sponsors translate complex asset stories into financeable transactions by matching each deal with the right mix of lenders, debt funds, and structured capital providers.

Finding Opportunity Where Capital Has Not Fully Arrived

The best CRE opportunities in 2026 are not always obvious. They exist in sectors with real demand but higher financing complexity. Investors who understand this dynamic and design their capital strategy accordingly gain a meaningful edge.

As industrial and multifamily remain crowded, the next wave of opportunity will belong to sponsors who can navigate nuance, structure intelligently, and execute with certainty. In today’s market, capital strategy is no longer a back-office function. It is a competitive advantage.

Office Cap Rates Cool, Hinting at Value Bottom?

by: Yurick Lee

After two years of turbulence, the U.S. office market may be nearing a turning point. According to CBRE’s H1 2025 Cap Rate Survey, stronger income prospects, easing capital pressures, and improved investor sentiment are emerging across major metros. Cap rates, which peaked in 2024, have begun to ease, signaling that values may be stabilizing and optimism is returning, even for lower-tier assets.

While elevated financing costs continue to weigh on deal flow, these early signs suggest that pricing stability is setting in. Here at Lever Capital Partners, we’ve also seen a meaningful increase in interest across our office mandates, a sharp change from just a year ago. For investors, this period could mark the early stages of a reset, one where patient capital begins to reprice risk and position for recovery.

Cap Rate Trends Suggest Pricing Stability and Renewed Investor Confidence

Office cap rates are finally showing signs of leveling off. CBRE’s H1 2025 Cap Rate Survey notes that “cap rates have declined slightly and yields appear to be at (or beyond) their cyclical peak,” suggesting the market may have reached a turning point.

Investor sentiment is improving as values stabilize and income prospects strengthen. CBRE’s market brief indicates most participants believe cap rates have peaked, signaling growing confidence that the correction phase is largely behind us.

For lower-tier or value-add assets, once hit hardest by hybrid work and tighter lending, this shift could reopen opportunities as tenants return and pricing normalizes in select markets.

Elevated Financing Costs Continue to Shape Short-Term Strategies

Despite a more positive tone, financing costs remain a defining factor in the market’s next phase. Even as inflation cools, borrowing rates have not dropped meaningfully. According to CBRE’s market outlook, office cap rates rose “by at least 200 basis points” between early 2022 and late 2023 as higher interest rates pushed up borrowing costs and reduced proceeds from traditional lenders.

This environment has forced investors to rethink underwriting assumptions and deal structures. Rather than waiting for dramatic rate cuts, many are now building models around sustained higher-rate conditions, seeking predictability over perfection. As a result, investment strategies are evolving: shorter hold periods, lower leverage, and an increased emphasis on stable income are becoming the norm.

Meanwhile, the growth of private credit underscores how tighter liquidity and elevated rates have redefined the capital landscape. With banks maintaining conservative positions, private lenders and alternative credit platforms are stepping into the void, offering sponsors more creative, but often costlier, financing options.

Sponsors Are Turning to Alternative Capital to Bridge Until Markets Normalize

With traditional lending channels constrained, sponsors are increasingly turning to bridge loans, mezzanine debt, and preferred equity to keep projects funded and flexible. These layers of capital fill critical gaps between senior debt and sponsor equity, allowing transactions to proceed even when conventional financing is limited.

Citrin Cooperman’s 2025 Real Estate Financing Outlook highlights that mezzanine and preferred equity have become vital tools for bridging short-term funding needs. Similarly, Gibson Dunn’s 2025 Commercial Real Estate Insights notes that non-bank lenders and alternative capital providers are stepping up to supply liquidity, particularly in transitional and value-add office assets.

These flexible structures allow sponsors to refinance later into long-term, lower-cost debt once market conditions stabilize. In effect, they keep projects moving forward, preserving asset value and investor relationships during the recovery phase.

How Lever Capital Partners Can Help

As traditional lenders remain cautious, Lever Capital Partners (LCP) helps sponsors access the flexible capital they need to keep deals alive. By arranging structured financing solutions, including mezzanine and preferred equity layers, LCP helps bridge the gap between limited senior proceeds and total project cost.

This strategy enables sponsors to maintain project momentum today and refinance into lower-cost, long-term loans once the market fully normalizes. For assets in weaker office markets, such customized capital stacks are often the difference between stalled and successful outcomes.

With cap rates beginning to cool and investor sentiment improving, the bottom of the office market may already be in sight. Sponsors who act decisively, leveraging creative capital to stabilize assets now, will be best positioned to benefit when the recovery accelerates.he next cycle of innovation, partnership, and long-term value creation in commercial real estate.

$2 Trillion Maturity Wall: Navigating the Coming Refinancing Wave

by: Adam Horowitz

Over the next 18 months, nearly $2 trillion in CRE loans are scheduled to mature across the country. What’s emerging is a defining challenge, and opportunity, for both borrowers and lenders: a refinancing wall that demands creative capital solutions.

Many of these loans were originated during the low-rate era between 2019 and 2021, when abundant liquidity and compressed cap rates fueled aggressive underwriting. Today, high interest rates, lower valuations, and cautious lending have converged to make refinancing increasingly difficult. The result is a market-wide repricing cycle that’s testing every part of the capital stack.

A Market at a Crossroads

Rising rates have eroded property values and debt service coverage ratios across most major asset classes. In certain markets, valuations are down 20-40% from peak levels, making full refinancing at par nearly impossible.

Traditional lenders, particularly regional and community banks, are tightening exposure and prioritizing renewals over new originations. Meanwhile, private credit and debt funds are stepping in to capture market share, often providing flexible bridge or structured debt where banks have pulled back.

This shift has turned the capital markets landscape into a dual-track system: institutional lenders remain selective, while private capital is driving most of the transaction flow. For borrowers, this means navigating a more fragmented market, one where relationships, credibility, and creative structuring matter more than ever.

The Borrower’s Challenge

For many owners, the refinancing wall represents a squeeze between valuations and debt capacity. Properties with stable income but lower appraised values can’t support their existing loan balances under today’s higher rates.

Lenders are increasingly offering short-term extensions, partial paydowns, or structured modifications to buy time, but these solutions often come with tighter loan covenants and higher pricing. For others, the answer lies in bringing new capital to the table through pref equity, mezz, or JV recaps.

From Crisis to Opportunity

Behind the headlines of distress lies a more dynamic reality, a market flush with capital seeking yield and structure. Opportunistic investors and funds are actively targeting recapitalization opportunities rather than foreclosures.

Sponsors willing to engage early and restructure intelligently can position their assets for long-term stability, or even expansion. Creative refinancing strategies, executed with the right capital partner, can transform a maturity problem into a value creation moment.

How Lever Capital Partners Can Help

At Lever Capital Partners, we specialize in helping clients navigate complex refinancing and recapitalization scenarios through a combination of market insight, capital relationships, and structuring expertise.

  • Creative Refinancing Solutions – We arrange bridge loans, mezzanine financing, and preferred equity to help borrowers close the refinancing gap without losing control of their assets.
  • Access to Active Capital Sources – Our relationships span private credit funds, institutional lenders, and family offices seeking exposure to well-structured CRE debt opportunities.
  • Strategic Advisory on Extensions & Recaps – We guide sponsors through loan modifications, extensions, and partial paydowns, preserving flexibility and ownership.
  • Capital Stack Optimization – From senior debt to equity, we design tailored capital stacks that align with each project’s cash flow, risk profile, and long-term vision.
  • Market Intelligence & Positioning – Our team provides real-time insight into lender sentiment, spreads, and underwriting criteria, ensuring each client’s financing package stands out.

Turning the Wall into a Window

The coming refinancing wave will separate reactive borrowers from strategic ones. Those who act early, communicate transparently with lenders, and engage experienced capital advisors can transform pressure into opportunity.

For Lever Capital Partners and our clients, this $2 trillion maturity wall represents not a dead end, but a window into the next cycle of innovation, partnership, and long-term value creation in commercial real estate.