Regional and community banks dominate small/middle-market CRE lending, construction, owner-occupied, value-add, and repeat-sponsor refi.
What do regional/community banks execute well?
Construction (still, though tighter per Fed SLOOS). Owner-occupied commercial. Value-add bridge with sponsor recourse. Repeat-sponsor refi where the bank knows the property and the sponsor. Soft-deposit relationships where the operating account is also at the bank.
Best execution comes when the borrower is in-market for the bank (i.e., the bank's lending footprint covers the property's geography), the loan size matches the bank's hold-or-sell preferences, and the sponsor has a deposit or treasury relationship to anchor the credit.
Where banks are less competitive
Pure perm on stabilized institutional product (life cos and CMBS price better). Highly leveraged value-add (debt funds price better even at higher rates). Multifamily perm at scale (agency dominates). Anything requiring fully non-recourse from a sponsor without a deep relationship.
Bank tightening: what the data shows
Per the Federal Reserve's SLOOS, the share of banks reporting tighter standards on CRE loans has been net positive since 2022, with the highest tightening in construction and value-add. Many banks reduced or paused new CRE lending in 2023 and have only partially re-opened.
Per the OCC's Semiannual Risk Perspective, CRE concentration is the most-watched risk topic for examiners. Banks with high CRE concentrations (300%+ of capital) are under particular scrutiny and may price or size differently than banks with lower concentrations.
Process and timeline
Term sheet 7 to 14 days from a complete package. Closing 45 to 75 days from term sheet for stabilized perm; longer for construction (60 to 120 days from term sheet) and value-add bridge with a complex story credit.
Most regional banks meet credit committee weekly; community banks typically biweekly. Internal hold limits and CRE-concentration thresholds can drive deal sizing more than the underwriting math, so getting hold-limit visibility early avoids surprises late in the process.
Decision-maker access
Decision-makers are the chief credit officer, the CRE department head, and the relationship banker for known sponsors. Direct access is normal at community banks; at larger regional banks, the relationship banker carries the deal into committee and the credit officer may be one step removed.
Sponsors with deposit and treasury relationships typically reach decision-makers fastest. The bank views the lending relationship plus the deposit relationship as one credit, and the deposit-relationship piece often controls how aggressively the bank competes on the loan.
Frequently asked questions
How do I find the right regional bank for my deal?
Geography first (the bank must be in-market). Then asset class fit. Then loan size relative to the bank's typical commitment range. Then sponsor relationship. We maintain coverage with most active regional banks in our four primary metros.
Are bank construction loans still available?
Yes, but more selectively than 2020 to 2022. Best opportunities for sponsors with strong existing relationships, lower-leverage requests, and recourse acceptance.
Sources
- Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) · Board of Governors of the Federal Reserve System · 2026-Q1
- Quarterly Banking Profile · Federal Deposit Insurance Corporation · 2026-Q1
- Semiannual Risk Perspective · Office of the Comptroller of the Currency · 2025-12