CREFC 2026 Conference Takeaways: Debt Is Back; Equity Is Not (Yet)

One of the clearest takeaways from this year’s CREFC Conference was that today’s transaction slowdown is not being driven by a lack of debt capital. To the contrary, debt is plentiful across the capital stack. The real constraint is equity.

Lenders have largely established a valuation “floor” based on loan-to-value thresholds, but equity investors have not yet settled on cap rate levels they are comfortable underwriting. Continued uncertainty around interest rates, cap rates, and select property types is keeping equity on the sidelines. The result: plenty of capital chasing deals, but not enough deals to chase.

That dynamic was apparent in nearly every meeting and side conversation. There was no shortage of lenders eager to deploy capital, yet transaction volume remains muted. While market participants expect volume to increase in 2026, most believe that uptick will be driven primarily by refinancings rather than acquisitions.

Refinancings Will Drive Near-Term Activity

A significant wave of maturities is approaching in 2026 and 2027, particularly from five- and ten-year loans originated in a very different interest rate environment. Many of these assets will require new equity to refinance successfully, given higher cap rates and more conservative LTV standards than at original closing.

The prevailing view is that equity will be slow to step in, which may force some properties to market or push capital stacks toward more creative solutions such as preferred equity or alternative debt structures. While refinancing volume is expected to increase this year, many are still waiting for a broader revival in the equity markets that has yet to materialize.

Property Types: Diverging Narratives

Certain asset classes (retail, industrial, and self-storage) received relatively little attention, which in itself is telling. These sectors are generally viewed as stable for now.

Multifamily, however, dominated much of the discussion and remains highly polarizing. In owner-focused panels, the tone was optimistic, with speakers expressing confidence in the asset class. In servicing discussions, the picture was far less encouraging: approximately 21% of assets in special servicing are multifamily. Informal audience polling suggested that, after data centers, multifamily is the sector causing the most concern.

The challenges are multifaceted. Operating expenses have surged, deferred maintenance postponed during the COVID years must now be addressed at significantly higher costs, and Sunbelt markets are grappling with oversupply and flat or declining rents. In many cases, NOI has declined materially, creating real distress. Performance is also highly sponsor-dependent, with some operators lacking the expertise needed to manage through today’s environment. In certain blue-state markets, tenant-friendly regulations are further pressuring cash flow by complicating rent collection and enforcement. The consensus: multifamily risk is highly regional and sponsor-specific, and underwriting is becoming more detailed, conservative, and unforgiving.

Office: A Market of Three Tiers

Office is slowly finding its footing, but the market is clearly segmented. Prime markets such as New York are seeing renewed interest in Class A and select Class B assets on a deal-by-deal basis. Class A office outside major markets sits in a middle tier with more limited enthusiasm, while lower-quality assets remain deeply challenged. Some markets, including San Francisco, are seeing spillover demand tied to data center growth, though questions remain about the durability of that trend.

Data Centers and the Banking Outlook

While data centers continue to attract attention, there was skepticism about their long-term durability as an investment. Power constraints, rapid obsolescence, and uncertain exit strategies (particularly given the high leverage required) have made some lenders cautious. Many hope that the sector’s allure simply diverts capital away from traditional real estate, freeing up opportunities elsewhere.

Looking ahead, FDIC-regulated banks are expected to re-enter the market more meaningfully following recent regulatory shifts. With leadership changes now in place, market participants anticipate policy adjustments that could increase bank lending activity. Large banks appear heavily focused on data centers, which may leave non-bank and alternative lenders with greater room to pursue more traditional real estate deals.

The Final Takeaway

Transaction volume is expected to rise, driven largely by refinancing activity. Debt capital is ready and available, but equity remains hesitant. Until pricing expectations realign, lenders will continue to chase a limited pool of deals, waiting for equity to re-engage and unlock broader market activity.