Colliers Capital Markets recently sat down with John Randall, National Production Manager, and Shahin Yazdi, Executive Managing Director, from Colliers Debt & Structured Finance to discuss the rapidly evolving lending landscape, where capital is flowing today, and what borrowers should be watching as the cycle continues to unfold. 

Colliers Capital Markets (CCM): How would you characterize liquidity today? 

Shahin Yazdi (SY): Liquidity remains abundant and highly competitive across the debt stack, particularly in bridge lending and private credit. Significant capital has been raised across debt funds, insurance companies, and agencies, and lenders are actively seeking opportunities to deploy it. Capital continues to outpace deal flow, with some lenders beginning to underwrite more aggressively as the year unfolds.

John Randall (JR): To put it simply, there is a significant amount of capital allocated to commercial real estate credit for 2026. In the multifamily space, both Fannie Mae and Freddie Mac entered the year with allocations up roughly 20%, totaling $88 billion each. Banks are back in a meaningful way aiding the favorable lending environment, and life insurance company allocations are up across the board. Corporate and investor spreads remain very tight. Even with recent market movements, most double-A’s are still trading inside 50 basis points, making commercial mortgage loans an attractive alternative for fixed-income investors. All of that is reinforcing a liquidity-driven market.

CCM: What does that mean for pricing and underwriting? 

JR: Competition is compressing spreads faster than fundamentals are improving. Lenders are beginning to sharpen terms to win business, with some moving into lower spread ranges and, in select cases, accepting more aggressive underwriting assumptions than they would have a year ago. That said, discipline has not disappeared. As capital pushes for deployment, there is still an acute focus on sponsor quality, asset condition, and realistic assumptions.

CCM: Is office financeable today? 

SY: Office remains selective, but it is not shut down. In fact, we’re seeing a bounce back in specific markets. Capital is focused on high-quality, well-located assets and basis-reset opportunities, while weaker locations continue to face challenges.

CCM: Are you seeing more structured or rescue capital? 

SY: Yes, mezzanine and preferred equity capital are increasingly active as sponsors address over-levered positions and upcoming maturities. Many of these opportunities are tied to loans that have already been extended over the past few years and are now reaching a point where lenders are pushing for resolution.

CCM: Is the market headed toward a major reset? 

SY: Adjustments are happening gradually rather than through a single reckoning. There’s a growing recognition that this is the rate environment we’re operating in, and decisions are being made with that reality in mind. Equity is taking hits in certain situations, transactions are happening at reset bases, and lenders are pushing borrowers to make decisions — but it’s playing out in stages, not all at once.

JR: There’s a maturity cliff aided by the fact that banks hold roughly 40% of outstanding CRE debt and tend to maintain relatively short loan durations. We shouldn’t underestimate bankers’ ability to extend, restructure, and smooth what looks like a cliff into a gentler slope. That’s exactly what we’ve seen over the past couple of years.

CCM: What advice are you giving clients right now? 

JR: If a deal works today, take it. De-risk near-term maturities and avoid assuming a materially better rate environment will arrive in the near term. That often means refinancing or restructuring based on today’s appraisals and market comps while lenders remain receptive. With the possibility of distressed transactions influencing valuations down the line, locking in financing and stabilizing balance sheets now can help avoid additional risk. The focus is on acting pragmatically in the current environment and taking advantage of available liquidity and certainty while it’s there.

Colliers Debt & Structured Finance delivers tailored financing solutions, connecting clients with the right capital source – across agency, bank, life company, and debt fund executions. Click here to learn more.