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Banks Are Back in CRE. They're Also Still Cleaning House.

Banks are lending on commercial real estate again while many still sell off old problem loans. With a 2026–27 maturity, plan your refinance for both.

Editorial5 min read

By Marckensie Theresias, Founder, Blue Ledger Capital

$1.5T

CRE mortgages maturing in 2026 ($875B) and 2027 ($652B)

MBA [6]

5.24%

10-year Treasury yield, Oct 9, near its Oct 5 high

U.S. Treasury [2]

30%

Banks' share of non-agency CRE loan closings, Q2 (up from 24%)

CBRE [4]

−21%

Estimated loss one bank took to sell $205M of problem loans

BCB Bancorp 8-K [5]

Third-quarter bank earnings opened on Tuesday, October 13, and the first three reports showed both halves of the story. At Wells Fargo, commercial charge-offs rose to 0.18% of loans from 0.10% in the second quarter, driven by commercial real estate and business loans. Its nonperforming assets also fell $585 million on fewer nonaccruing CRE loans, and it set aside less for CRE losses [8]. JPMorgan added $539 million to reserves, and Jamie Dimon said the bank is "tightening up a little bit on credit" [12]. Citi added $369 million, citing the economic outlook and loan growth [13]. Bank of America reports Wednesday, and Truist and Regions report Friday. The message so far: big banks are lending and their CRE books are healing, but they are getting choosier, and smaller banks are still paying to get rid of the loans they already have. Borrowers who plan for only one of those will be caught off guard.

The good news: banks want CRE again

For two years the story was that banks had stepped back and debt funds had taken over. The second-quarter numbers show a more complicated picture. In CBRE's data, debt funds and other alternative lenders closed 38% of non-agency CRE loans, up from 34% a year earlier. Banks also gained, to 30% from 24%. CMBS fell to 11% from 19% [4]. In July the Fed's survey of loan officers found banks easing standards a little on apartment and other CRE loans, and large banks easing across the board [9].

Who is closing non-agency CRE loans

Share of non-agency commercial loan closings by lender type, Q2 2026 vs. Q2 2025

Q2 2025Q2 2026Debt funds / alternative34%38%Banks24%30%CMBS19%11%
Life companies were 21% in Q2 2026. These are pre-hike figures. Source: CBRE Lending Momentum, Q2 2026 [4].

Problem loans at the largest banks are also falling. At banks with more than $250 billion in assets, the share of investor-owned CRE loans that were past due or not accruing interest was 3.08% in the second quarter, the seventh straight quarterly decline [3].

"Banks are lending again" and "banks are getting out" are both true. It depends on the loan.

The catch: the cleanup isn't finished

On September 25 New Jersey's BCB Bancorp said it had sold $205 million of problem loans, about $181 million of them commercial real estate, at an estimated $43.3 million pre-tax loss, roughly 21 cents on the dollar [5]. The CEO said the sales "meaningfully de-risk" the balance sheet. That's the bank's view. Seen from the borrower's side, a bank that will take a 21% loss to exit a loan is not going to extend it on easy terms.

Rates aren't helping. The Fed raised rates in September by a 12–0 vote, and its minutes released October 7 said another increase "would likely be appropriate" by year end [1]. The 10-year Treasury was 5.24% on October 9 [2], and Freddie Mac's 30-year average was 7.40% on October 8, up from 6.30% a year ago [7]. Commercial and multifamily mortgage debt has hit a record $5.1 trillion [10], and about $1.5 trillion of CRE mortgages come due in 2026 and 2027 [6].

What we'd do with a 2026–27 maturity

1

Ask your bank now, in writing

Does it plan to renew, and on what terms? A bank that's shrinking its CRE book may want you to refinance out. Learn that 12 months early, not 60 days early.
2

Get parallel quotes

Banks, debt funds, life companies, agency lenders and DSCR lenders price the same property very differently right now. Non-QM and DSCR bond issuance already passed last year's record by August [11], so there is real capital in that market for smaller rentals.
3

Re-run the numbers at today's rates

Size the new loan to a 10-year above 5%. If the proceeds don't cover the payoff, find out now how much equity, preferred equity or mezzanine money you'd need.
4

Watch the next two data points

The Fed meets October 27–28, and its next loan officer survey is expected in early November [9]. If banks tighten after the September hike, the window for easy renewals narrows.

The bank that made your loan five years ago may still be in the CRE business, and it may still want out of your loan specifically. Find out which, early, and have a second and third option ready before you need one.

Sources

  1. Federal Reserve, Minutes of the FOMC meeting of Sept 15–16, 2026, released Oct 7, 2026. federalreserve.gov
  2. U.S. Department of the Treasury, Daily Treasury Par Yield Curve Rates, October 2026. treasury.gov
  3. FDIC, Quarterly Banking Profile, Second Quarter 2026, Aug 25, 2026. fdic.gov
  4. CBRE, "Commercial real estate lending fundamentals remain strong," Q2 2026, Aug 3, 2026. cbre.com
  5. BCB Bancorp, Form 8-K exhibit 99.1, Sept 25, 2026. sec.gov; American Banker, "NJ bank's losses to mushroom as loan cleanup accelerates." americanbanker.com
  6. Mortgage Bankers Association, "17 percent of commercial and multifamily mortgage balances to mature in 2026," Feb 9, 2026. mba.org
  7. Freddie Mac, Primary Mortgage Market Survey, Oct 8, 2026. freddiemac.com
  8. Wells Fargo, Third Quarter 2026 earnings release, Oct 13, 2026. wellsfargo.com; company announcements of Q3 2026 earnings dates (Bank of America, Truist, Regions), Sept–Oct 2026. jpmorganchase.com
  9. Federal Reserve, Senior Loan Officer Opinion Survey on Bank Lending Practices, July 2026. federalreserve.gov
  10. MBA NewsLink, Chart of the Week: year-over-year change in commercial and multifamily mortgage debt, Oct 10, 2026. newslink.mba.org
  11. National Mortgage News, "Non-QM securitization record signals secondary market shift," 2026. nationalmortgagenews.com
  12. JPMorgan Chase third-quarter 2026 earnings call, Oct 13, 2026, as reported by Yahoo Finance, "JPMorgan Chase & Co. Q3 earnings call highlights." finance.yahoo.com
  13. Citigroup, Form 8-K exhibit 99.1, third quarter 2026 results, Oct 13, 2026. sec.gov

This is an opinion editorial, not financial, investment, legal or tax advice, and not an offer of credit or financing. Predictions are the author’s views. Blue Ledger Capital arranges financing with third-party lenders and funders, who make all credit decisions and set all rates and terms. On some loans, Blue Ledger Capital may be named lender of record at closing under a table-funding arrangement; those loans are funded at closing by a third-party lender.

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