“Many properties won’t face forced sales but will need fresh funds to address strained capital structures, cure covenants, fund capex, or bridge to future refinancing,” Snyder said. “Expect recapitalizations and bridge loans to represent a meaningful share of deal flow as liquidity improves.”
New office debt
The office sector continues to face significant challenges, even as some prime office real estate is starting to bounce back. However, for struggling office space, it’s not as simple as just converting the property.
“Distress remains high,” Snyder said. “While outcomes for these properties are uncertain, many will eventually require new debt. Remote work fundamentally changed how much office space is needed in today’s economy. That doesn’t mean all office buildings are struggling – many Class A+ assets have occupancy rates above 90%, but overall, we have too much office space, and some will need to be repurposed or rebuilt.
“Adaptive reuse is one option, but it’s costly and highly specialized. So far, conversions haven’t occurred at a scale that meaningfully shifts the supply-demand fundamentals for office or multifamily.”
From political uncertainty and tariff debates to rising credit costs and AI disruption, Jonathan Hornik of NPLA outlines the key forces that will define mortgage lending in 2026. https://t.co/Imft4PiejH
— Mortgage Professional America Magazine (@MPAMagazineUS) January 5, 2026
While many of the funding demands will be met by commercial real estate lenders, non-QM lenders continue to gain traction in the space. Snyder said he thinks the sector will continue to grow in 2026, especially as brokers seek solutions for unique borrowers or distressed properties.
Publisher: Source link
