Office reposition bridge in 2026 is hard to source above 60 percent loan-to-cost . Lenders prioritize sponsor track record, anchor-tenant leasing pipeline, and detailed capital-expenditure plan with full tenant-improvement and leasing-commission reserves .
What lender appetite exists?
Debt funds with office expertise will entertain repositioning loans on Class A or A- product in core markets where sponsor has either letters of intent in hand or genuine line-of-sight to leasing. Banks have largely exited speculative office bridge lending. CMBS does not finance transitional office.
How should sponsors structure the request?
Conservative basis (going-in cap rate at or above 8 percent on stabilized NOI assumptions), full TI/LC reserves funded at close, lease-up risk shared with lender via partial recourse or escrow holdbacks, and a clear take-out plan that reflects current office capital-market reality, not 2019 assumptions.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11
- Semiannual Risk Perspective · Office of the Comptroller of the Currency · 2025-12