Tag Archives: Refinancing

$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.

$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.