Lenders Are Hungry for Commercial Real Estate Right Now. Are You Getting the Terms You Deserve?

Written by:

Steve Marcinuk

Date:

24 Apr 2026

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For most of the past decade, commercial real estate borrowers operated in an attractive rate environment. Capital was cheap, especially in the few years after COVID.  We saw the 10-year Treasury average yield range from 1.84% in 2015, down to .89% in 2020, and currently around 4.2%. That dynamic has reversed. Today, banks, credit unions, CMBS and Life Insurance companies are still competing aggressively for quality deals with more capital available than at any point in recent memory although rates for Borrowers over the last 3-4 years have jumped significantly resulting in a decrease in purchase and refinance activity unless a specific need arose.

David Smyle has watched this shift from the inside. A Vice President at Pacific Southwest Realty Services with three decades in commercial lending, he works primarily with Life Insurance companies to structure loans for most property types. Smyle says the volume of capital looking for a deal right now is unlike anything he’s seen in years.  All Lenders are flush with cash.

Nearly $936 billion in commercial real estate loans are maturing in 2026 alone, and lenders across every category are actively seeking borrowers to refinance them. The constraint is no longer access to financing. It’s knowing how to structure a deal that gets lenders competing for you, and depending on your existing leverage, figuring out how to refinance your current loan to meet debt coverage requirements based on higher interest rates compared to 10 years ago, which could result in loan paydowns, structured workouts, or equity infusions.

Borrowers Hold More Leverage

Commercial real estate lending has surged over the past year, and projections for 2026 are higher still. Banks, Credit Unions, CMBS, Life Insurance Companies, Debt Funds, and Private lenders are all actively competing for loans to fill their annual budgets. For borrowers with attractive, lower leverage requests, the competition for their business can be fierce. Moderate leverage requests are also seeing multiple loan options, although at slightly higher rates and SBA seems to have an unlimited appetite.

Smyle sees it directly in how aggressively lenders are pricing and structuring deals. “There’s a lot of money out there on the sidelines,” he says. “Banks are very aggressive right now. Credit unions are aggressive. Everybody’s looking to put money out.”

That competition has real consequences for what borrowers can ask for. Life Insurance companies in particular are historically more conservative than banks but are now willing to accept lower debt coverage thresholds on deals with strong loan-to-value metrics, a flexibility that would have been unusual even a few years ago. The practical implication is that borrowers who treat the lending process as a take-it-or-leave-it transaction are almost certainly leaving terms on the table.

Structure Matters More Than Rate

For most borrowers, the instinct is to watch rates and wait. If the 10-year treasury drops another quarter point, the thinking goes, the deal gets better. That instinct isn’t wrong, but it’s incomplete, and in many cases it’s costing borrowers more than the rate itself as rates have trended up since the beginning of the IRAN war.

The more consequential variable in today’s market is how a loan is structured. Amortization schedules, interest-only periods, fixed-rate terms, prepayment flexibility — these elements can have as much impact on a borrower’s long-term position as the rate they lock in. And like rates, they can be negotiable with many Lenders right now.

This is where working with the right intermediary matters. Smyle describes his approach with Life Insurance companies as building a loan from scratch rather than fitting a borrower into a pre-existing product. “The nice thing about representing life companies and offering their programs is that there’s no specific set structure,” he says. “We can pretty much take what the client’s request is and turn it into a close, finished product.”That flexibility is available in the current market. But borrowers who approach lenders directly or work with intermediaries who lack access to this tier of capital often never know what they could have asked for. As Smyle puts it, even at today’s rates, a moderately leveraged long-term fixed rate around 6% is historically competitive. The question isn’t whether to borrow. It’s whether you’re borrowing on the right terms. As we speak, we are seeing long-term fixed rates in the low to mid 5% range for low-leverage deals.

How to Ask Correctly

Knowing the market has shifted in your favor is one thing. Knowing how to act on it is another. The borrowers getting the best terms right now aren’t necessarily the ones with the strongest properties. They are the ones who understand what to ask for and have someone in their corner who knows how to ask for it.

That starts with choosing the right type of lender for your situation. Banks and credit unions can move quickly and are competitive on price and cost, but their loan structures tend to be standardized. Life Insurance companies move more deliberately but offer something banks typically can’t: a willingness to build a loan around the borrower’s specific needs rather than fit the borrower into an existing product.

It also means coming to the table with a clear picture of your priorities. Do you need maximum flexibility to sell or refinance in five years? An interest-only period to manage cash flow during lease-up? A longer amortization to reduce monthly debt service? These are negotiable terms in the current market but only if you know to ask for them.

The Window Is Open

Smyle’s advice to borrowers facing refinancing decisions right now is measured. If your loan isn’t due immediately, some patience may be helpful as rates could ease modestly in the second half of the year. But he’s careful not to let that become an excuse for inaction. “These aren’t really bad rates, even where they’re at today,” he says. “If you could fix your rate at 6% or thereabouts for long term, historically, that’s a very good rate.”

The window for favorable terms won’t stay open indefinitely as future Fed Policy, world events and changes in Administrations can all affect rates. But for borrowers who understand the current dynamic  and work with someone who can navigate it, the market is offering more than most of them realize.

About the Expert: David Smyle is a Vice President at Pacific Southwest Realty Services (PSRS), a commercial mortgage banking company founded in 1972. He has spent three decades in commercial lending, specializing in typical Multi-family, Retail, Industrial and other commercial property including self-storage and triple net properties.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.