Interest Rates Spur 2026 Debt Capital Growth

Interest rates and debt capital trends in 2026 point to improved liquidity and borrowing conditions for commercial real estate.

January 13, 2026

Jordan B.

Interest rates are likely to ease as inflation stabilizes near 3% in 2026.
Debt capital for commercial real estate is set to improve amid rising lender activity.
CRE borrowing rates may remain stable or decline modestly, supporting deal flow.
Fannie Mae and Freddie Mac each raised 2026 lending caps over 20% to $88B.

Key Takeaways

Debt Capital Environment Poised for Upswing

Marcus and Millichap report that in 2026, stabilizing inflation and more flexible monetary policy are paving the way for stronger commercial real estate debt capital liquidity. Inflation, forecasted around 3%, is expected to keep interest rates in check and support a more dovish Federal Reserve stance. This environment sets the stage for improved access to debt capital for CRE investors.

Interest Rates and Inflation

The Federal Reserve maintained high interest rates through 2025, though inflation stayed lower than anticipated. Into 2026, inflation is projected to remain just above target—a level that could spur incremental rate cuts. Markets anticipate at least one 25-basis-point cut early in the year, with further easing possible if economic conditions hold. Long-term rates, as reflected by the 10-year Treasury, have stabilized between 4.00 and 4.25% since mid-2025, calming debt markets.

Housing holds the largest weight in the Consumer Price Index (CPI), making it a critical factor in shaping inflation and rate policy.

CRE Lending Liquidity Strengthens

Debt capital is set to become more accessible due to increased lender participation and higher lending caps from government agencies. Fannie Mae and Freddie Mac will each allow $88B in multifamily loans for 2026—a 20% increase. The Mortgage Bankers Association forecasts a 24% boost in overall commercial real estate lending volume this year. This rebound follows a notable upswing in liquidity trends that began taking shape in the second half of 2025, reflecting stronger investor confidence and healthier credit conditions. Rising loan-to-value ratios and supportive underwriting further indicate strengthening liquidity.

Outlook for Borrowers

Amid stabilizing borrowing costs and improving debt capital conditions, commercial real estate transaction velocity is poised to rise in 2026. While economic and policy uncertainties remain, CRE debt markets appear favorable for investors. Strong loan issuance and potentially declining borrowing rates will bolster acquisition and refinancing activity throughout the year.