This is second part of our 2026 predictions from the moderators of our upcoming 2026 Crittenden Report Finance Conference. What are the biggest changes or trends they foresee this year versus the past few years. The conference will be held in Newport Beach, Calif., on May 5-7. Here is what they had to say:
Jeff Pirhalla, EVP, BankFinancial
By 2026, commercial real estate lending is likely to feel less like a clean recovery and more like a practical adjustment to a changed market environment. While liquidity should continue to improve and interest rates appear more stable, a meaningful portion of the market will still be dealing with assets that do not line up neatly with long-term financing requirements. In many cases, values, income and capital structures are normalizing on different schedules. That timing gap, rather than outright credit stress, will remain a defining feature of lending activity.
Lenders will increasingly distinguish between core credit risk and execution risk. Rather than forcing all deals into permanent structures too early, capital will be deployed in ways that acknowledge the need for time and operating progress. Shorter-duration, more flexible capital will play a larger role in helping assets move from legacy debt toward eventual take-out financing, particularly for properties that are close to, but not yet demonstrating stabilized cash flow and operating consistency. That dynamic should keep well-capitalized, disciplined bridge lenders active through 2026.
On the technology side, 2026 will likely be a reality check for artificial intelligence in real estate. Most firms are still sorting out what problems they actually want AI to solve and how it fits into underwriting, asset management and portfolio oversight. The market will begin to separate tools that are built on strong data, thoughtful model development, and clear use cases from those that are heavy on presentation and light on substance. The winners will be those who focus on data quality, proper development and training of large language models, and automating time-consuming human tasks, rather than shiny dashboards or surface-level features.
A more subtle but important shift will be the industry’s move away from binary underwriting toward lending decisions rooted in probability, process and execution risk. In 2026, the focus shifts to understanding what must occur for a deal to succeed over time, how long that transition realistically takes, and where the execution risks lie. That way of thinking naturally places more weight on glide paths, phased business plans, partial stabilization, and clearly defined exit options, rather than single-point underwriting outcomes.
Capital structures will also continue to evolve. More lenders will stretch across the capital stack — not just for yield, but to stay involved as properties work through transition. Being able to adjust structure as an asset matures will increasingly be as important as pricing.
AI will support these changes quietly. Its most practical impact will be behind the scenes, helping lenders screen deal flow, standardize rent rolls and operating statements and identify execution risks earlier in the process. The goal will not be to replace judgment, but to apply it more consistently and efficiently across a larger volume of opportunities.
Taken together, 2026 is likely to reward lenders and investors who take a disciplined, flexible approach and are comfortable underwriting how a deal evolves over time — not just how it looks on day one.
Jared Schlosser, Head of Credit Originations and CPACE, Peachtree Group
The consumer continues to struggle and rate cuts are not going as fast as people hoped. This will create challenges in certain asset types and underwriting assumptions on deals. Acquisitions will be slow out of the gate in 2026 so it will still be a refinance heavy lending market.
I expect banks/credit unions to lend more in 2026, and the debt fund share to reduce compared to 2024/2025.
Rahul Shah, Managing Principal, Sherpa Capital Group
We believe private lending will remain strong in 2026. Local and regional banks are still cautious so borrowers who need quick answers and flexible terms will keep coming to private lenders.
Our company has had its busiest year ever, and we’re seeing better borrowers and stronger projects than before. Rates may ease a little but balance-sheet bank lenders will stick to conservative “down the fairway” deals leaving plenty of room for private lenders to step in.
The biggest challenge is who’s knocking on our door. A few years ago, private lenders were often the last resort. Now, we’re the first call for well-qualified borrowers who value speed and execution. We see a lot of “bridge-to-bridge” loan requests, which tells me that sponsors are having a difficult time exiting loans or raising new equity. Overall, expect private lending to keep growing because traditional banks aren’t lending as much as people think.
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Click here if you missed Part 1.
