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Every Monday, we discuss 1 idea that can increase both your cash flow and net worth through real estate financings and investments.

Background

Guardrail Finance is both a financial intermediary for multifamily and commercial real estate loans and a Sponsor of real estate equity syndications.

Interest Rates

Why Sponsors Should Start Their Refinance Conversations Early

If you're holding a commercial or multifamily asset with debt maturing anytime between now and late 2026, you may be sitting on one of the most important decisions of your investment cycle - how and when to refinance or recapitalize.

And while your asset performance may be strong, the capital markets environment is not what it used to be.

A Shifting Credit Environment

We’re now deep in the cycle. And asset values, lender appetite, and the market in general is in a state of recalibration. Interest rates remain elevated, lenders are more selective, and many banks have pulled back in meaningful ways. Many lenders are quietly extending loan maturities to avoid taking immediate write-downs, but that is likely only deferring the issue, not solving it.

Meanwhile:

• According to MSCI, CRE loan delinquencies have hit their highest level since 2014 at $116B
• Over $950B in U.S. commercial mortgage debt matures in 2025 alone according to the MBA
• Distress is spreading beyond office into multifamily and mixed-use segments
• According to CRED-IQ, cap rates are expanding, and valuations are down 10–20% in some submarkets

This isn't a reason to panic—but it is a signal to plan. Because if you're waiting until the last 60–90 days before maturity to explore options, I would posit that you are already behind.

Refinancing Is Not Just a Transaction—It’s a Strategy

Here’s the truth that doesn’t get said enough. Most deals that have issues are not because of the asset or the borrower. They have issues because the capital structure no longer fits the market reality.

I’m seeing strong sponsors—some with decades of experience—get tripped up by:

• Rigid loan terms that don’t match their business plan
• Lenders unwilling to roll forward unless there’s significant fresh equity
• Rate caps expiring or floating rates increasing, hurting DSCR and debt yield
• Slow leasing markets keeping the vacancy rates abnormally high
• Delays in value-add execution, making bridge-to-perm transitions difficult

The issue isn’t whether capital exists—it does. Private credit and debt funds are much open for business. Most permanent lenders are also open for busy albeit at more conservative terms. The real issue is whether you’re positioned well enough to access the capital, at reasonable terms, with enough time to maneuver.

The most prepared borrowers I talk to are doing three things:

• Engaging capital partners early – sometimes 9–12 months before a loan event
• Running multiple scenarios – including partial refis, preferred equity, mezzanine, and/or capital infusions
• Re-underwriting their own assets with today’s cap rates, rents, and Debt Service Coverage Ratios in mind

And they’re not just looking for the lowest rate—they’re evaluating structure, flexibility, and execution certainty. The goal isn’t just to close. It’s to close on terms that still give you room to breathe and execute.

It's About Precision

You don’t need to take drastic action. You just need to thoroughly plan and explore options.

If your debt is maturing in the next 6–18 months:

• When was the last time you updated your assumptions?
• Do you have backup lenders identified in case Plan A doesn’t pencil?
• Are you thinking through debt + equity holistically—not just in silos?

The next few quarters will separate those who react from those who prepare. The opportunity isn’t just to protect your deal—it’s to improve it, often by planning and adjusting the capital stack, or by improving your financing terms proactively.

A Lending Hand

If you’re navigating this now and want a second set of eyes on your options, I’m happy to talk.

No pressure. Just a strategic conversation about what capital is actually available for sponsors like you—and how to get to the other side of this cycle in a stronger position.

Because in markets like this, arranging the optimal capital stack becomes your edge.

Email me at robert@guardrailfinance.com to start the conversation and explore upcoming financing opportunities tailored to your goals.

Best Regards,

Robert Newstead
Guardrail Finance
​Capital advisory for the middle-market | Debt & Equity | Real Estate Syndications

Navigating the Market with Guardrail Finance

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