Monday Market Moves | Week of January 6, 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: Capital Planning for Multifamily Owners Heading Into 2026

As the market turns the calendar to 2026, capital markets activity is being shaped less by volatility and more by discipline. Interest rates have stabilized relative to earlier cycles, but underwriting standards remain conservative, lender selectivity is high, and execution timelines are longer than many owners expect.

In Chicago, multifamily continues to be the most liquid asset class, supported by steady occupancy, limited new supply in many neighborhoods, and consistent lender appetite. At the same time, both acquisitions and refinances require more preparation than they did just a few years ago. Whether you are looking to buy or refinance in 2026, early capital planning is now a competitive advantage.

Below is how we would approach capital planning today, depending on your objective.

Chicago Market Context

• Chicago multifamily continues to attract both local and out-of-state capital, particularly in neighborhood submarkets with strong rental demand and manageable unit sizes.

• Lenders remain active, but leverage is disciplined and proceeds are increasingly driven by in-place performance rather than projections.

• Agency, regional bank, and private credit capital are all available, but each comes with different expectations around structure, documentation, and timing.

Against that backdrop, preparation matters.

If You’re Planning a Multifamily Acquisition

For buyers, financing strategy is now inseparable from the acquisition process itself.

How We Advise Clients to Approach an Acquisition:

• Align leverage expectations early. Many buyers still underwrite to leverage targets that the market no longer consistently supports. Understanding realistic proceeds upfront avoids last-minute gaps.

• Stress-test cash flow under today’s rate environment. DSCR, not headline rate, is often the binding constraint on loan size.

• Identify lender appetite before bidding. Certain lenders are more competitive on stabilized assets, others on value-add or smaller deal sizes. Knowing who is active matters.

• Prioritize certainty of close. In competitive Chicago submarkets, sellers are increasingly favoring buyers who can execute cleanly, even if the headline price is lower.

In today’s market, buyers who align financing early often gain an edge before offers are even submitted.

If You’re Planning a Refinance

For owners, refinancing in 2026 is less about timing the market and more about setting realistic expectations.

How We Advise Clients to Prepare for a Refinance:

• Review in-place performance versus lender underwriting. Rising expenses, insurance costs, and conservative assumptions can materially impact proceeds.

• Model multiple scenarios. Refinance, partial paydown, extension, or bridge-to-perm structures may all be viable depending on objectives.

• Understand your timeline. Refinancing is no longer a 60-day exercise. Documentation, lender review, and credit committee processes take time.

• Decide what matters most. For some owners, maximizing proceeds is the goal. For others, flexibility, interest-only periods, or non-recourse structure drive the decision.

Owners who begin these conversations six to twelve months ahead of maturity retain far more optionality than those reacting under deadline pressure.

Bottom Line

Heading into 2026, capital markets reward preparation. Whether you are acquiring or refinancing multifamily in Chicago, the most successful outcomes are driven by early planning, realistic underwriting, and alignment between strategy and execution. Rates may move at the margin, but structure, timing, and certainty continue to define results.

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