Monday Market Moves | Week of January 19, 2026

Welcome to Monday Market Moves, the weekly series from Essex Capital Markets briefing you on Chicago commercial real estate capital markets. We cover key trends in CRE debt, refinancing, and capital structures to help investors and owners navigate today’s financing environment.

This Week: What Lenders Are Saying No To Right Now and Why

As capital markets move further into 2026, it’s becoming clear that availability of capital is not the issue. Lenders remain active across multifamily and select commercial assets. What has changed is how selectively that capital is being deployed.

In today’s market, understanding where deals fall outside the credit box is just as important as knowing where lenders are still saying yes. For borrowers, the difference often comes down to preparation, structure, and local market knowledge.

What Lenders Are Pushing Back On

While every deal is different, we are seeing consistent themes where lenders are slowing down, resizing, or declining transactions.

• Pro forma–driven underwriting

Deals that rely heavily on future rent growth or expense normalization without clear in-place support are facing resistance. Lenders are prioritizing actual performance over projected upside.

• Thin cash flow and limited margin for error

Even stabilized assets are being scrutinized when DSCR leaves little room for stress testing. Higher expenses and conservative assumptions are directly impacting proceeds.

• Unresolved insurance and operating expense volatility

Lenders want clarity on costs, not assumptions that insurance or expenses will normalize on their own. Uncertainty here often leads to delayed approvals or reduced leverage. The more specific the underlying documentation to support the assumptions, the better.

• Late-stage structure changes

Requests for additional proceeds, interest-only periods, or leverage adjustments late in the process are increasingly difficult to accommodate. Credit committees are rewarding discipline and early alignment.

• Compressed timelines without preparation

Deals that enter the market unprepared are struggling to gain traction. Execution risk has become a deciding factor, particularly for lenders balancing year-over-year allocation pressure.

Why Local Knowledge Matters More Than Ever

In Chicago, these dynamics are magnified at the neighborhood level. Lenders are underwriting submarkets more granularly than before, with sensitivity to tenant profiles, local supply dynamics, and, in some cases, even block by block operating performance.

Understanding which lenders are active in specific neighborhoods, how they view local rent trends, and where they are comfortable taking risk can materially change outcomes. Local knowledge often determines whether a deal is restructured successfully or stalls entirely.

What This Means for Borrowers

A lender “no” today does not necessarily mean a deal is unfinanceable. More often, it signals that structure, expectations, or timing need adjustment.

Borrowers who engage early, align underwriting assumptions with lender reality, and lean on market-specific insight are preserving far more optionality than those reacting late in the process.

Bottom Line

Capital remains available in Chicago, particularly for multifamily and well-positioned assets. But approvals are narrower, underwriting is disciplined, and execution matters. Understanding what lenders are saying no to, and why, is now a critical part of navigating the market successfully.