Construction lending bounces back, spreads widen, borrowers hit pause
November 5, 2026
Cole and Omar interview Andrew Pabon, Altus Group’s Director of Debt Advisory, to break down the Q3 2026 US debt capital markets survey results. With Treasury yields spiking above 5% and the Fed signaling “even higher for even longer,” they explore what’s changed in CRE lending and borrowing. Construction financing has roared back with quotes jumping from 3% to 13% of activity, but borrowers hit pause at the end of the quarter as uncertainty peaked. Spreads widened across the board, floating-rate products returned as lenders and borrowers seek clarity, and fixed-rate loans took the biggest hit from yield movements. They also discuss seniors housing as the hot sector, how negative leverage is affecting valuations, and the gap between legacy loan coupons and today’s elevated rates.
Resources:
Altus Group Q3 2026 US Debt Capital Markets Survey
Key moments
03:14 The new market narrative
04:18 The construction paradox: quotes jump despite rising rates
06:48 Underwriting without a Fed roadmap
09:42 Spread compression stalls across the pricing grid
12:11 Floating-rate products return
14:09 Who’s borrowing and lending for construction now
17:14 Fixed-rate loans hit harder by yield moves than floating
20:16 Stable bank data vs. rising market pricing
Your guests and host
Cole Perry
Associate Director of Research
Altus Group
Omar Eltorai
Senior Director of Research
Altus Group
Andrew Pabon
Director Global Advisory
Altus Group
Manage your commercial real estate investment risks
Whether managing an asset or portfolio, or raising and investing capital, we support you in your strategy, risk management, and decision-making.
Resources
Latest insights
Disclaimer
This publication has been prepared for general guidance on matters of interest only and does not constitute professional advice or services of Altus Group, its affiliates and its related entities (collectively “Altus Group”). You should not act upon the information contained in this publication without obtaining specific professional advice.
A number of factors may influence the performance of the commercial real estate market, including regulatory conditions and economic factors such as interest rate fluctuations, inflation, changing investor sentiment, and shifts in tenant demand or occupancy trends. We strongly recommend that you consult with a qualified professional to assess how these and other market dynamics may impact your investment strategy, underwriting assumptions, asset valuations, and overall portfolio performance.
No representation or warranty (express or implied) is given as to the accuracy, completeness or reliability of the information contained in this publication, or the suitability of the information for a particular purpose. To the extent permitted by law, Altus Group does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. The distribution of this publication to you does not create, extend or revive a client relationship between Altus Group and you or any other person or entity. This publication, or any part thereof, may not be reproduced or distributed in any form for any purpose without the express written consent of Altus Group.