Lending standards ease — constructive signal for commercial real estate

US commercial real estate (CRE) got an encouraging signal. Banks have begun to ease underwriting standards for CRE loans for the first time since interest rates started rising in 2022, according to the January 2026 Senior Loan Officer Opinion Survey (SLOOS) from the Federal Reserve. It suggests lenders are gaining confidence that market conditions have stabilized and that risks are becoming more manageable. 

This shift toward easing is expected to boost CRE loan origination activity and support property transaction growth, broadening investment opportunities within CRE equity and credit. Similar turns in lending standards have historically tended to occur early in recovery phases, often marking the start of a new capital cycle. Comparable patterns followed the tech downturn in the early 2000s, the post–Global Financial Crisis period beginning in 2011, and the economic reopening after the COVID-19 era stimulus in 2021–2022. (See the chart below.) The January 2026 SLOOS reported a net tightening of -3.16% (negative numbers reflect net easing) across combined CRE loan types, including construction and land development loans, loans secured by nonfarm, nonresidential properties (e.g., office, retail, industrial), and multi-family loans. Anything less than zero means underwriting standards are easing; greater than zero means underwriting standards are tightening.

While modest, if this shift into net easing continues into future quarters, it could support a gradual improvement in commercial property values and movement into a virtuous cycle of more CRE transactions and opportunity. While loan originations are expected to grow broadly across lender types, market share over recent years has moved up significantly for private non-bank CRE lenders, which averaged 4.6% of total CRE loan originations from 2010–2020. Post-pandemic, their share averaged 8.6% from 2021 through Q3-2025.¹