Feet on the Street – The final push to year end what to expect in 2026.
In my former career as a Division President for one of Southern California’s largest Plumbing Contractors, I received great advice from my boss, the CEO: “In the midst of summer, when you can’t take another job because you have no manpower, hit the gas pedal and sign up as much as you can”. Why would he say this? If I brought another job to my team, they would question both my sanity and my heritage!
The reason is quite simple and very smart.
- Big waves of work do not last forever.
- Make sure you have enough winter work to keep staff working and finish the year strong.
- That momentum guarantees you will have a solid start to the New Year.
In every business platform, this strategy can and should be applied.
In construction lending it was a slow summer, but September popped…
In September, we saw more activity than in the previous four months. It felt like someone turned on the hose water full blast. Why is this?
Was it truly the “doldrums of summer” effect resulting in reduced activity?
Did the level of uncertainty we felt earlier in the Spring subside?
Are people not as concerned with Tariffs as they were in March?
I am not sure anyone will be able to answer this question, but here is what we recently learned:
- Our friends at Slatt Capital wrote “After several years of muted activity, CMBS (Commercial Mortgage-Backed Securities) lending is making a notable comeback in 2025. As capital markets stabilize and investor appetite for yield returns, CMBS lenders are re-entering the market with competitive pricing, higher leverage, and a renewed focus on core and transitional assets.”
- According to multiple clients, payoffs are up. This increased cash position can require a shift in strategy to redeploy capital.
I’ve hear quite a bit about clients getting payoffs. Increased cash
Then October and November cooled…
What felt like a possible restart quickly faded. Perhaps we will see another push in the remaining weeks of the year? Only time will tell.
What are people saying?
- Nothing has really changed in the market. Valuations and the cost of capital have not moved significantly in either direction.
- Lenders are competing for business, there is ample capital at the ready, it is the borrowers who are slow to act.
- New project proforma’s are structured the long-term, which is the historic norm. Quick appreciation is no longer.
- Construction costs have stabilized and labor fears over ICE raids have subsided.
- Multi-Family Home projects continue to strengthen, while Single Family Home projects equally weaken.
- The South-Eastern U.S. market is strong as many sub-markets remain affordable.
- The bumps of 2025 are likely to continue in 2026, but as the market has reset, more deal volume is widely anticipated.
Meetings are in full swing.
We have booked multiple client meetings this quarter, which is always good. I am looking forward to reviewing plans, strategies and providing ways we can help contribute to making projects successful.
In closing
When I was a home builder, I vividly remember a conversation with a trusted investor about a tough time in the market. After analyzing our project, the projections and a way forward, he ended with “You know, you can be just as surprised by good news as bad.” I never forgot that and draw upon it from time to time. Commercial Real Estate is not for the faint of heart. Optimism, combined with a good plan, and hard work, breeds hope, success and better outcomes.
Wishing you a very Happy Holiday season and Cheers to 2026!
Greg Norris
QuickDraw is the go-to fund control partner for residential, commercial and industrial construction projects. From coast to coast, QuickDraw makes the fund disbursement process a positive experience for all. We provide an array of services including Fund Control, Draw Inspections, Cost Reviews and Portfolio Management.