Monday Market Moves | Week of December 1, 2025
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, borrowers, and lenders navigate today’s commercial real estate financing market.
This Week: Lenders Are Shifting Into 2026 Mode Earlier
As lenders wrap up 2025 allocations, many have already begun operating under their 2026 credit frameworks earlier than usual. The 10-Year Treasury remains stable around the low 4 percent range and SOFR has flattened and lenders have generally maintained consistent underwriting standards ahead of the new cycle.
This shift is affecting DSCR minimums, liquidity expectations, rollover scrutiny, and leverage on transitional assets. Even with steady rates, approvals continue to be sensitive to structure, sponsor strength, and execution readiness.
Why Lenders Are Moving Early
Three key pressures are pushing lenders into a 2026 mindset:
• Allocation rollovers. Many lenders have filled their 2025 buckets and are already underwriting with next year’s guardrails in mind.
• Credit caution. Despite rate stability, many lenders expect slower economic momentum in early 2026 and that may lead to proactively tightening to manage that risk.
• Maturity visibility. With a heavy 2026 to 2027 maturity pipeline, lenders want early clarity on refinance needs and sponsor exposure.
The takeaway: borrowing conditions are tighter than base rates would suggest.
National Landscape: Stable Rates, Shifting Credit Standards
Nationally, lenders remain active but selective. Fixed-rate pricing has improved, but tighter credit criteria may begin to offset some of the benefit.
• DSCR floors are starting to move up across banks and life companies, including on stabilized multifamily.
• Liquidity requirements and post-closing reserves are under closer review.
• Transitional assets such as lease-up multifamily and repositionings are sizing lower than earlier in Q4, due primarily.
Agencies are also preparing their 2026 priorities, with affordability and mission-driven scoring influencing the best pricing.
Chicago Signals: 2026 Underwriting Is Already in Today’s Quotes
In Chicago, the early shift is clear:
• Multifamily is still the most liquid asset class, but lenders want clean T-12s, predictable renewals, and DSCR above threshold for competitive terms.
• Value-add multifamily is experiencing the most pressure, especially where rent growth assumptions exceed 2025 performance.
• Regional banks are placing heavier emphasis on sponsor liquidity, global cash flow, and existing exposure.
For borrowers coming to market in December and into the new year, the key question is shifting from “what’s my rate?” to “what credit box is my deal being judged against?”
Commercial Real Estate Financing Opportunities and Risks
Opportunities
• Rate stability creates a window to lock in structure before 2026 credit policies become more restrictive.
• Stabilized multifamily assets with strong financials are still receiving competitive lender attention.
• Borrowers who move early can benefit from lenders looking to build their 2026 pipeline.
Risks
• Leverage for transitional assets may be lower than even one month ago.
• Strong sponsor metrics are becoming a requirement rather than an advantage.
• Waiting until to transact may mean facing even tighter credit standards as lenders finalize their 2026 themes.
Bottom Line
Rates may be stable, but the credit environment may be tightening. As lenders shift into 2026 underwriting earlier than expected, deal sizing, structure, and sponsor review will likely become more conservative. For Chicago owners with refinancing needs in the next 12 to 18 months, December and January offer a strategic opportunity to secure stable pricing before credit standards become more restrictive in the new year.
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