Where CRE Capital Is Actually Flowing in 2026

Banks, private credit, and the maturity wall are reshaping commercial real estate liquidity. A look at where capital is moving, where it isn't, and what that means for sponsors and investors.

Originally published on LinkedIn in January 2025. Materially refreshed for the web with updated 2026 data, restructured argument, and a sharper focus on where capital is actually flowing.

Key Takeaways

US bank CRE loan books reached $3.07 trillion in March 2026, with lending standards loosening through most of 2025 before modest tightening in Q4.
Private credit AUM is expected to exceed $2 trillion in 2026, with real estate debt fundraising hitting $51 billion in 2025, the highest annual total since 2021.
2025 CRE transaction volume reached $560 billion, up 14.4% year-over-year and the second consecutive annual increase.
Roughly $936 billion in CRE debt matures in 2026, putting refinancing demand at the center of capital flows.
Capital is concentrating in stabilized multifamily, industrial, grocery-anchored retail, and low-basis acquisitions. Speculative office and high-leverage deals remain difficult to fund.

For most of 2024, the dominant story in commercial real estate was simple: there's no liquidity.

That was always an overstatement. Capital didn't vanish, it relocated. Eighteen months later, the picture has clarified, and the more accurate description is that CRE liquidity is structurally different than it was at the peak of the zero-rate era.

Private credit kept the share it took. Banks are coming back, more selectively. Transaction volume has begun to recover. And the maturity wall is now the central force shaping where money goes.

Here's what's actually happening.

Banks are back at the table, with conditions

The 2023 narrative, that banks had pulled out of CRE lending entirely, never quite matched the data. What did happen was a sharp tightening of standards. According to the Federal Reserve's Senior Loan Officer Opinion Survey, 67.4% of banks were tightening CRE lending standards in April 2023. By June 2025, that number had fallen to 9%.

Lending standards eased again through most of 2025 before banks reported modest tightening in the fourth quarter, with demand still rising. Bank CRE loan balances tell the same story. As of March 2026, US commercial banks held $3.07 trillion in CRE loans, with balances now growing rather than shrinking.

What this doesn't mean is that the previous decade is back. Bank capital is more disciplined, more focused on existing relationships, and more skeptical of construction and transitional risk. But the door is open, especially for sponsors with track record, real equity, and deals that pencil at today's debt costs.

Private credit kept the ground it took

Private credit didn't recede when banks came back. It scaled.

The US private credit market sits around $1.3 trillion in AUM, with the broader category, including real estate debt, asset-backed finance, and direct lending, expected to exceed $2 trillion globally in 2026 and approach $4.5 trillion by 2030, per Preqin and Moody's projections.

Real estate debt has been a particular bright spot. Debt fund fundraising hit $51 billion in final closes in 2025, the highest annual total since 2021. New entrants from RXR, AEW, GID, Wellington, Schroders, and others have launched debt strategies in the past 18 months, signaling that allocators are treating real estate credit as a durable category rather than a cyclical opportunity.

The Mortgage Bankers Association forecasts $805 billion in commercial mortgage originations in 2026, up 27% from 2025. That growth isn't coming from one source. It's a blended capital stack, with banks, life companies, CMBS, agencies, and private credit competing for the same deals.

The maturity wall is now the dominant force

Roughly $936 billion in CRE debt is scheduled to mature in 2026, per S&P Global Market Intelligence. Combined with 2025 maturities, the industry is working through more than $1.5 trillion in refinancing demand inside a two-year window.

That's the single most important context for understanding current capital flows.

Sponsors with debt coming due aren't choosing between aggressive growth capital and conservative refinancing. They're choosing between getting refinanced at a higher rate, recapitalizing with fresh equity, restructuring with the existing lender, or losing the asset. Lenders, both banks and private credit, are pricing risk into that reality, and refinancing dynamics are absorbing a meaningful share of available capital.

This is also why transaction volume has recovered without a return to peak pricing. Forced sellers, recapitalizations, and basis-driven acquisitions are doing a lot of the work.

Where capital is flowing

Inside this environment, three deal profiles are getting funded reliably.

Stabilized cash flow

Multifamily with demonstrated occupancy, industrial logistics in real demand corridors, grocery-anchored retail, and net lease assets with credit tenants. Per Altus Group, 2025 was the first year since 2022 that all four major property types posted positive year-over-year price growth in every quarter. Apartment transaction volume reached $43.8 billion in Q3 2025 alone, up 13% year-over-year.

Low-basis acquisitions

Assets purchased below replacement cost, from distressed or motivated sellers, through recapitalizations, or via note purchases. These deals don't need rent growth or cap rate compression to work, and lenders underwrite them more comfortably.

Credit-first capital stacks

Senior-secured debt, preferred equity, whole-loan structures, and low-leverage joint ventures. Equity is still being deployed, but increasingly through structures with contractual returns rather than market-timing exposure.

Where capital still pulls back

Office without a clear repositioning path remains the hardest property type to finance. National office vacancy stood at 18.6% in Q1 2026, per CBRE. The headline number obscures a sharp split. Prime office vacancy is 12.7% and tightening, while the bottom tier is bleeding tenants and value. Lenders have learned to price that bifurcation.

Speculative ground-up development without meaningful pre-leasing or sponsor equity remains difficult. And highly leveraged deals, the kind that needed cap rate compression to work, are still effectively unfundable.

The second-order effect

The shift most people miss isn't just where capital flows. It's how it makes decisions.

Capital in 2026 is faster to say no, more focused on debt yield than LTV, more interested in downside scenarios than upside cases, and far less willing to stretch on assumptions. That has created a quiet divide between sponsors who underwrite to today's reality and sponsors who are still hoping the market comes back to them.

The first group is closing deals. The second is waiting.

Bottom line

Liquidity didn't disappear in 2023, and it didn't fully return in 2026. What happened is more durable. Capital reorganized around credit, basis, and execution. Banks share the table with private credit now. Refinancing demand is shaping flows as much as new investment. And the deals getting funded look very different than they did at the peak.

For sponsors and investors who understand how this market actually works, the opportunity is real. It just doesn't show up in the headlines. Learn how VAC partners with investors or submit a deal.

Sources

About the Author

Andrew Dunn is a Principal at VAC Development, a commercial real estate investment and operating firm focused on retail and industrial assets across the Southwest and Mountain West. VAC underwrites with basis discipline as its core thesis, acquiring and building below replacement cost in infill markets where supply is constrained and demand drivers are durable.

Banks, private credit, and the maturity wall are reshaping commercial real estate liquidity. A look at where capital is moving, where it isn't, and what that means for sponsors and investors.

Originally published on LinkedIn in January 2025. Materially refreshed for the web with updated 2026 data, restructured argument, and a sharper focus on where capital is actually flowing.

Key Takeaways

US bank CRE loan books reached $3.07 trillion in March 2026, with lending standards loosening through most of 2025 before modest tightening in Q4.
Private credit AUM is expected to exceed $2 trillion in 2026, with real estate debt fundraising hitting $51 billion in 2025, the highest annual total since 2021.
2025 CRE transaction volume reached $560 billion, up 14.4% year-over-year and the second consecutive annual increase.
Roughly $936 billion in CRE debt matures in 2026, putting refinancing demand at the center of capital flows.
Capital is concentrating in stabilized multifamily, industrial, grocery-anchored retail, and low-basis acquisitions. Speculative office and high-leverage deals remain difficult to fund.

For most of 2024, the dominant story in commercial real estate was simple: there's no liquidity.

Private credit kept the share it took. Banks are coming back, more selectively. Transaction volume has begun to recover. And the maturity wall is now the central force shaping where money goes.

Here's what's actually happening.

Banks are back at the table, with conditions

Private credit kept the ground it took

Private credit didn't recede when banks came back. It scaled.

The maturity wall is now the dominant force

That's the single most important context for understanding current capital flows.

This is also why transaction volume has recovered without a return to peak pricing. Forced sellers, recapitalizations, and basis-driven acquisitions are doing a lot of the work.

Where capital is flowing

Inside this environment, three deal profiles are getting funded reliably.

Stabilized cash flow

Low-basis acquisitions

Credit-first capital stacks

Where capital still pulls back

The second-order effect

The shift most people miss isn't just where capital flows. It's how it makes decisions.

The first group is closing deals. The second is waiting.

Bottom line

For sponsors and investors who understand how this market actually works, the opportunity is real. It just doesn't show up in the headlines. Learn how VAC partners with investors or submit a deal.