Sometimes in commercial real estate, the past does more heavy lifting than the future. The Federal Reserve's Federal Open Market Committee has not signaled whether it will lower rates again in 2026, but several cuts made last fall are still working their way through the financial system—and that lag may prove decisive for the year ahead.
As Trepp Chief Economist Rachel Szymanski points out, the effects of monetary policy move through the economy with the familiar "long and variable lags." Because the federal funds rate first influences overnight inter-bank lending, it takes time for those shifts to reach broader financing markets, including commercial real estate.
That delayed transmission matters for CRE in two fundamental ways this year: the availability and pricing of capital by risk level and how borrowers and lenders resolve a wave of upcoming loan maturities.
The uneven deployment of capital continues to favor stabilized properties with steady cash flows and clear operating histories. As GlobeSt.com has reported, underwriting standards have increasingly relied on cash flow models to gauge future property performance rather than on expected appreciation.
The pattern also appears in CMBS issuance. In 2025, the market recorded roughly $130 billion in issuance, dominated by single-asset, single-borrower deals, which accounted for more than two-thirds of total activity (126 out of 176). Spreads on lower-risk assets remain tight, suggesting any early easing will likely benefit only the most stable properties.
The open question, Szymanski noted, is how far "down the risk spectrum capital moves as the rate cuts take hold."
That question looms large over $146 billion in CMBS loans maturing this year, including $76 billion of the $598 billion in total outstanding that will mature in 2026. In recent years, many borrowers and lenders chose the "extend and pretend" strategy. But going forward, the market may demand clearer outcomes. Loans may be refinanced at current debt yields and leverage levels, reshaped through modifications or structured solutions, or pushed toward liquidation.
Definitive answers may not come quickly. Even as policymakers debate future actions, the effects of last year's decisions will continue to spread outward—testing how patience pays off in a market built on timing.
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