Monday Market Moves | Week of February 2, 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: Commercial Real Estate Financing FAQs — What Chicago Owners Are Asking in Q1 2026

As Chicago’s commercial real estate market continues to adjust to higher-for-longer rates, shifting lender appetites, and a growing wave of loan maturities, property owners are asking more questions about timing, structure, and execution.

At Essex Capital Markets, many of today’s conversations are less about chasing the lowest rate and more about understanding options, managing risk, making informed decisions in a more selective lending environment, and matching the best lending options with our clients’ overall strategy for the asset and for their portfolio.

Below are the most common commercial real estate financing questions we’re hearing from Chicago owners and operators right now, along with high-level insights to help frame the discussion.

1. Is it too late to refinance if my loan matures this year?

Short answer: not necessarily, but timing matters more than ever.

As a loan approaches maturity, lender options tend to narrow and underwriting becomes more conservative. Borrowers inside a 90-day window may face fewer structures, tighter proceeds, or higher pricing.

What we’re seeing:

• Lenders prioritize deals with adequate lead time

• Optionality declines quickly as maturity approaches

• Early engagement allows time to address gaps proactively

2. Should I refinance now or wait for rates to come down?

This is one of the most common questions we hear, and the answer depends less on predicting rates and more on understanding risk and objectives.

While many borrowers are hopeful for future rate cuts, waiting can introduce execution risk, especially if cash flow, values, or lender sentiment shift unexpectedly.

What we’re seeing:

• Treasury and SOFR volatility continues to impact pricing

• Some borrowers are prioritizing certainty over perfect timing

• Delaying a refinance can increase exposure to market changes; most notably the risk of increased spreads.

3. What are lenders actually underwriting right now?

Underwriting standards have become more disciplined compared to prior cycles, with a strong emphasis on in-place performance rather than pro forma assumptions.

What we’re seeing:

• Higher DSCR requirements than 2021–2022

• Conservative rent growth assumptions, and no trending of rents after a market level is reached

• Increased scrutiny of operating expenses and reserves, taxes and insurance being most notable

4. Are banks lending again, or is everything still agency?

Regional and local banks are definitely re-entering the market, but activity remains selective. Agencies continue to play a central role in multifamily financing, particularly for stabilized assets.

What we’re seeing:

• Banks favor strong sponsorship and in-place cash flow

• Agencies remain competitive on pricing and leverage

• Asset type and leverage drive lender selection

• For transactions under $5MM, Agencies are becoming much more selective.

5. What happens if my property no longer supports my old loan amount?

Many borrowers refinancing today are discovering that proceeds are lower than their prior loan balances due to valuation resets and tighter underwriting.

What we’re seeing:

• Borrowers needing to address refinance gaps

• Capital solutions ranging from paydowns to supplemental equity

• Increased use of creative structuring to bridge gaps

6. Is bridge financing risky in today’s market?

Bridge financing can be a useful tool, but only when paired with a realistic exit strategy and disciplined underwriting.

What we’re seeing:

• Bridge loans can be used to manage timing and reposition assets

• Greater focus on exit assumptions and take-out feasibility

• Clear differentiation between strategic bridge use and distress

7. How early should I really be talking to a lender?

Earlier engagement creates flexibility. Later engagement creates pressure.

What we’re seeing:

• Borrowers engaging earlier have more lender options

• More time allows for better structure and pricing

• Compressed timelines limit execution strategies

8. What deals are actually getting done right now in Chicago?

Despite broader market uncertainty, deals are still closing across Chicago, particularly for well-located, well-capitalized assets.

What we’re seeing:

• Continued activity in stabilized multifamily

• Pricing expectations becoming more aligned

• Lenders supporting deals with clear fundamentals

9. How much equity are lenders expecting borrowers to bring in?

Equity expectations have shifted, especially for refinances and transitional assets.

What we’re seeing:

• Higher equity requirements than prior cycles; underwriting is focused on DSC first and leverage second.

• Differences across agency, bank, and bridge executions

• Increased focus on sponsor liquidity and alignment

10. What should I be doing now if my loan matures in 12–24 months?

The earlier the planning process begins, the more control borrowers have over outcomes.

What we’re seeing:

• Early analysis helps identify risks well ahead of maturity

• Market monitoring informs timing decisions

• Proactive planning expands execution options

Conclusion

Every financing decision is unique, but the questions borrowers are asking today reflect a shared need for clarity, preparation, and realistic guidance.

In a more selective capital markets environment, informed planning and early engagement can make the difference between limited options and a successful execution.

If any of these questions sound familiar, it is often a sign that a conversation should start sooner rather than later.

To speak with our Capital Markets team, please fill out the form below.