The CRE debt market in Q1 2026 is not one market — it's five or six different markets operating simultaneously, each with its own credit logic, appetite, and pricing dynamic. If you're approaching lenders with a broad process and a generic deck, you're leaving significant execution risk on the table.
Here are three things I'm watching closely right now that are shaping how we're structuring capital markets processes for active mandates.
1. Banks are open — but selectively, and on specific terms
The narrative that regional banks are completely out of CRE isn't accurate. What's true is that they're significantly more selective on asset type, geography, and sponsor profile than they were in 2021-22. Multifamily in primary markets with institutional sponsors? Banks are competitive. Value-add office or retail with a thin balance sheet sponsor? They're not your lender right now.
More importantly, the "relationship bank" model is alive. We're seeing institutions extend credit to sponsors they know — sometimes on terms that are genuinely better than the debt fund market — precisely because they want to maintain those relationships. If you don't already have that relationship, a good advisor can often proxy it.
"The sponsors who will close in this environment are the ones who know exactly which lender to call first — not the ones who blast 40 capital sources and wait."
2. Debt funds are the most active capital, but rate dispersion is massive
Debt funds are where the volume is right now — bridge, construction, transitional — and competition among funds for quality deals is real. But the pricing spread between the best and worst term sheets I've seen on identical deals in the last 90 days is over 200 basis points. The process you run, and who you bring to the table first, matters enormously.
The funds most aggressively deploying right now are the ones with committed capital from recent vintage closes. They need to put money to work. That gives sponsors with quality assets real leverage — if they know who those funds are.
3. Mezzanine and preferred equity are filling the gap — but structure matters
Senior lenders have pulled back on leverage in most asset classes. The resulting gap between what a senior lender will go to and what a sponsor needs to close is getting filled with mezz and preferred equity — but not all of it is structured the same, and the difference between a clean preferred equity fill and one that creates problems at refi is significant.
We're seeing a lot of sponsors accept the first preferred equity term sheet they get because they're under time pressure. That's a mistake. The intercreditor dynamics, the preferred return mechanics, and the exit provisions in that mezz or pref document will follow you all the way to disposition.
The summary: capital is available, but the market rewards sponsors who approach it strategically. Know your lender set before you go to market. Run a disciplined process. And don't accept structure today that creates problems tomorrow.
If you're working on a mandate and want to pressure-test your capital strategy before you engage lenders, reach out — that's exactly the kind of conversation we're built for.