Home›Real Estate›Commercial›Texas lenders remain selective despite commercial debt…

Texas lenders remain selective despite commercial debt market reopening

ConnectCRE reports lenders are back in the commercial real estate debt market, but deal processing remains slow, credit terms are still tight, and small deals under $2.0 million are out of favor.

Reported · Written up by our desk · Commercial

ConnectCRE reports lenders have returned to the commercial real estate debt market, but they are maintaining strict criteria, keeping deal volume and timelines constrained. At the upcoming Texas Multifamily 2026 in-person event on August 13 in Dallas, lending experts discussed how capital is flowing, but on tighter terms than many borrowers want.

Vic Clark, senior managing director with Lument, framed the environment as difficult and slow to process, with no broad easing of credit conditions. Clark said agencies are providing fewer waivers on smaller transactions, deals under $2.0 million are out of favor, and appraisal issues are increasingly affecting underwriting as values decline and cap rates rise.

Clark added that rents have not fully stabilized in most markets, and concessions are at a peak in oversupplied areas. He also said rates have continued to creep upward with no clear relief in sight, though he believes the industry may be close to a bottom.

On underwriting, Clark said standards have tightened over the past twelve months amid market volatility and uncertainty. He noted lenders will consider deals that make sense, but risk is harder to manage when sponsorship quality and liquidity are weak, and he advised bringing in new partners in those cases.

More like this

Sources