The commercial real estate lending market in 2026 is defined by one thing above all: liquidity. This was the clear takeaway from the recent industry panel led by Hilary Provinse, EVP – Production and Capital Markets of Berkadia’s mortgage banking platform, who was joined by Patrick Matsson, Managing Director at KKR, Drew Fung, Managing Director at Clarion Partners, and Kathleen Corton, Managing Partner and CEO at Saluted Grade.
Liquidity is Reshaping CRE Finance
2025 was a record year for many, and the panelists agreed that this momentum is carrying into 2026. According to new MBA data, last year saw $633 billion in total CRE lending—about 27% higher year-over-year—with projections for $805 billion in 2026. Provinse noted, “Liquidity in the market is unlike anything I’ve seen in my 30-year career,” highlighting the breadth of active participants: GSEs, banks, life companies, private debt funds, and new entrants like REITs forming direct lending arms.
The Market Is Competitive Across the Board
- Top-of-the-stack, big-asset lending (>$50M): Dominated by large institutions like KKR (with $44 billion AUM in real estate credit).
- Middle market ($20-50M): Increasingly served by nimble life companies and private lenders, taking advantage as minimum loan sizes at funds rise.
- Structured products: Mezzanine, preferred equity, and bridge loans are now central to platforms like Myron, who blend operating expertise with creative capital stacks.
What’s Hot: Multifamily, Industrial, and the New Alternatives
Panelists referenced half of recent originations in multifamily, with industrial as a secondary focus. Alternatives—such as senior living, student, manufactured housing, RV parks, and even marinas—are drawing growing interest, in part to diversify away from office headwinds but also to capitalize on secular shifts and demographic tailwinds (e.g., “silver tsunami” in seniors housing).
The Maturity Wave & Opportunity
With nearly $1 trillion in loans maturing in 2025-2026, capital is needed not just for acquisitions, but to refinance and restructure existing debt. Panelists observed that while “extend and pretend” is fading, forced transactions and workouts remain gradual, creating windows of opportunity for well-capitalized buyers and recapitalization specialists to gain access to product.
Banks, Securitization, and Spread Compression
Big takeaway: banks are back in a major way. Not only are they lending directly, but also providing back-leverage to private credit and driving spread compression. Securitization markets (CMBS/CLO) are functioning efficiently, offering borrowers multiple refinancing and capital stack options.
What Borrowers and Investors Need to Know
- Winning requires flexibility. Creative structuring, speed, and adaptability are crucial as competition for assets, borrowers, and yield intensifies across lender types.
- Risk-adjusted returns are under pressure as spreads tighten, but well-located, cash-flowing assets—especially in multifamily, senior, and workforce housing—remain attractive.
- Efficiency and execution matter. As more capital chases deals, those who can move quickly and negotiate complex capital stacks will have the advantage.
Looking Ahead—Cautious Optimism
Panelists are confident 2026 will deliver strong activity, though cautious about extending underwriting standards. The vast amount of available capital, especially from non-bank sources, is likely to keep fueling lending, innovation, and new opportunities as borrowers adapt to a shifting interest rate and demographic landscape.