Commercial Real Estate Loans $2M to $100M+

Understanding the Commercial Real Estate Lending Landscape

Commercial real estate financing operates in a fundamentally different universe than residential mortgages or small business loans. When you're seeking $2 million to $100 million or more in capital, you're entering a sophisticated marketplace where institutional lenders, government agencies, private debt funds, and life insurance companies compete for your business—each with distinct underwriting criteria, risk appetites, and pricing models.

In 2026, the CRE lending environment has stabilized following the interest rate volatility of 2022–2024. The Federal Reserve's measured approach to monetary policy has created a more predictable rate environment, allowing lenders to offer competitive fixed-rate products with confidence. For borrowers, this means renewed access to long-term, fixed-rate financing at levels not seen since early 2022.

The key to success in CRE financing is understanding which capital source matches your specific deal. A stabilized 100-unit multifamily property in a primary market will attract entirely different lenders than a value-add office building in a secondary market or a ground-up industrial development. Soconsulto's role is to navigate this complexity on your behalf, matching your transaction with the optimal lender from our network of 50+ capital partners.

Multifamily Financing: The Agency Advantage

Fannie Mae Multifamily and Freddie Mac Multifamily (Optigo) remain the dominant capital sources for apartment financing in the United States. Together, they provide approximately 40% of all multifamily debt originations annually, offering unmatched liquidity, competitive pricing, and standardized underwriting.

For 2026, both agencies have expanded their green financing programs, offering rate reductions of 10–30 basis points for properties that meet energy efficiency standards. This can translate to significant savings over the life of a loan. A $10 million loan at a 20-basis-point green discount saves approximately $200,000 in interest over 10 years.

The Fannie Mae Delegated Underwriting and Servicing (DUS) program allows approved lenders to underwrite and close loans without direct Fannie Mae review for qualified transactions, dramatically speeding up the process. Our DUS lender partners can close stabilized multifamily loans in 45–60 days, compared to 90+ days for non-delegated processes.

Bridge Loans & Construction Financing: Speed and Flexibility

Not every commercial real estate transaction fits the mold of stabilized, income-producing properties with long-term tenants. Bridge loans and construction financing serve the critical need for short-term capital during transitional periods—acquisitions before stabilization, renovations before lease-up, or development before occupancy.

Bridge loans typically feature:

• Loan terms: 12–36 months, with extension options
• Interest rates: SOFR + 250–500 bps (typically 8.5%–12%)
• Interest-only payments: Preserving cash flow during transition
• Loan-to-cost (LTC): Up to 85% for acquisitions, 75% for refinances
• Prepayment flexibility: Many offer open prepayment after 6–12 months

Construction loans follow a different structure, with funds disbursed in draws based on completed work. Lenders require detailed construction budgets, contractor qualifications, and third-party inspections at each draw milestone. For ground-up multifamily development, HUD 221(d)(4) loans offer the most attractive long-term financing, but the application process takes 8–12 months. For faster timelines, private construction lenders can close in 30–45 days at higher rates.

Cash-Out Refinancing: Unlocking Trapped Equity

Property values have appreciated significantly over the past decade for well-located commercial assets. Cash-out refinancing allows owners to extract this accumulated equity without selling the property, providing capital for portfolio expansion, partner buyouts, or diversification into new markets.

The key metric for cash-out refinancing is Loan-to-Value (LTV). Agency lenders typically allow cash-out up to 75% LTV for multifamily properties, while private lenders may stretch to 80% for strong sponsors. The amount of cash you can extract depends on:

• Current property value: Based on recent appraisal or broker opinion of value
• Existing loan balance: The amount you currently owe
• Closing costs: Typically 2–4% of loan amount for agency loans, 1–2% for bridge
• Reserve requirements: Lenders may require 6–12 months of debt service reserves

For example, if you own a multifamily property worth $15 million with an existing $8 million loan, a 75% LTV cash-out refinance would provide a new $11.25 million loan. After paying off the existing $8 million loan and $300,000 in closing costs, you'd receive approximately $2.95 million in cash—tax-free loan proceeds that can be deployed into new investments.

Industrial & Logistics: The E-Commerce Gold Rush

The explosion of e-commerce has fundamentally reshaped industrial real estate demand. Last-mile delivery centers, cold storage facilities, and automated fulfillment warehouses command premium rents and attract institutional capital. For investors and developers in this sector, financing options have expanded dramatically.

Key industrial financing considerations:

• Clear height: Modern logistics requires 32–40+ foot clear heights; older buildings with 24-foot ceilings face obsolescence risk
• Loading capabilities: Truck court depth, dock doors per 1,000 SF, and trailer parking ratios are critical underwriting factors
• Location: Proximity to major highways, ports, and population centers drives rental rates and lender confidence
• Tenant credit: Investment-grade tenants (Amazon, FedEx, Walmart) unlock the best financing terms

Life insurance companies are particularly active in industrial lending, offering 10-year fixed rates at spreads of 150–250 basis points over Treasuries for properties with strong tenant credit. For speculative development, construction lenders typically require 50–60% pre-leasing before funding.

Office & Retail: Navigating the New Normal

The post-pandemic landscape has created a tale of two markets for office and retail properties. Class A buildings in prime locations with modern amenities, flexible layouts, and strong tenant rosters continue to perform well. Class B and C properties in secondary locations face significant headwinds.

For office financing in 2026, lenders focus intensely on:

• Occupancy trends: Is the property maintaining or growing occupancy?
• WALT (Weighted Average Lease Term): Longer lease terms provide stability; sub-3-year WALT raises concerns
• Tenant credit quality: Diversified tenant mix with investment-grade anchors preferred
• Amenity packages: Fitness centers, outdoor space, food halls, and collaboration areas drive tenant retention
• Conversion potential: Office-to-multifamily or office-to-life science conversions may unlock value

Retail has shown surprising resilience for grocery-anchored centers, neighborhood retail, and experiential destinations. Lenders favor properties with essential retailers (grocery, pharmacy, medical) and strong sales per square foot. Big-box retail and enclosed malls face the most challenging financing environment.

The CRE Underwriting Process: What Lenders Really Look For

Understanding the lender's perspective is essential for positioning your deal for success. Commercial real estate underwriting evaluates five core pillars:

1. Property Cash Flow (NOI): Net Operating Income is the foundation of all CRE lending. Lenders calculate NOI by subtracting operating expenses (excluding debt service and depreciation) from gross rental income. A property generating $1.2 million in NOI with $800,000 in debt service has a 1.50x DSCR—well above the 1.25x minimum.

2. Debt Service Coverage Ratio (DSCR): This measures the property's ability to cover debt payments. Most lenders require 1.25x–1.35x for stabilized properties, 1.15x–1.20x for value-add with strong sponsorship, and 1.00x–1.10x for construction with interest reserves.

3. Loan-to-Value (LTV) / Loan-to-Cost (LTC): LTV measures loan amount against appraised value for acquisitions and refinances. LTC measures loan amount against total project cost for construction and heavy renovation. Lower leverage means better rates and terms.

4. Sponsor Experience & Credit: Lenders evaluate the borrower's track record, net worth, liquidity, and credit history. For non-recourse loans, sponsor strength still matters for carve-out guarantees and completion guarantees.

5. Market & Submarket Fundamentals: Population growth, job growth, rent growth trends, new supply pipeline, and regulatory environment all factor into lender confidence. Primary markets (NYC, LA, Chicago, Dallas, Atlanta) command the best terms.