Time to Run the Numbers Again
For South Shore owners who put real estate decisions on hold over the last few years, the numbers may be worth another look.
For the last few years, one assumption has shaped a lot of commercial real estate decisions on the South Shore: conditions are difficult, so unless you have to make a move, wait.
Financing was a big part of that. The rate environment that emerged from 2022 onward made transactions harder to underwrite, refinancing painful for anyone coming off a low coupon, and the economics of selling or acquiring more complicated than they had been in a long time. Waiting made sense for a lot of owners.
But the lending market has been changing quietly. Rates remain elevated compared with the last cycle, but the availability of capital, the level of lender competition, and the terms borrowers are seeing today are not where they were two years ago.
If your real estate strategy is still based on the environment of 2023 or 2024, it may be worth running the numbers again.
What the Data Shows
CBRE’s Q2 2026 lending data puts some structure around the shift.
The number and average size of loans both increased year over year. Commercial mortgage spreads narrowed 21 basis points to 204 basis points, average mortgage rates edged down to 5.7%, and debt service coverage ratios improved to 1.43 from 1.34. On the transaction side, CBRE expects commercial real estate investment activity to increase 16% for the full year.
The market is functioning better. But that does not mean easy money is back.
Commercial loan-to-value ratios actually declined to 59.6% from 60.8% a year ago. Lenders still want strong properties, sufficient cash flow, and borrowers who can support the debt. A good deal simply has more places to go looking for capital.
And rates remain well above the levels at which many owners originally underwrote their properties. Refinancing can still be difficult for anyone coming off a coupon in the 3% range, and better financing does not automatically translate into higher property values or make every transaction work.
The relevant comparison isn’t 2021. It is 2023 or 2024.
For an owner who ran the numbers then and decided to wait, enough of the inputs have changed to make it worth looking again.
What We’re Seeing on the South Shore
The national data suggests a more functional capital market. What we are seeing locally is a little more nuanced.
Activity has picked up. On the leasing side, we have seen considerably more movement over the last 8 to 12 months than we did during the previous two years. But tenants are still negotiating hard and asking for meaningful concessions, and landlords remain disciplined about where they are willing to put additional capital.
For financially strong or established tenants, landlords are generally willing to invest in improvements when the economics of the lease support it. With newer businesses, startups, or tenants without a financial track record, we are seeing landlords structure that investment more cautiously and in some cases requiring the tenant to fund improvements upfront and reimbursing those costs over time.
The investment market has its own version of that caution.
We have spoken with owners of off-market properties who would consider selling, but only if they can identify where the money goes next. That is particularly relevant for owners contemplating a 1031 exchange. Selling a property you know only makes sense if there is a replacement opportunity compelling enough to justify the move.
Buyers remain selective too. Investors have their own return requirements, and better financing does not suddenly make every property attractive at the asking price. For value-add investors in particular, a fully stabilized property trading at a low cap rate may simply not offer enough upside.
“The lending market is better” and “it’s a good time to sell” are not the same statement.
Recently, when an owner we work with began considering a sale, one of the first steps we offered was a current valuation of the property. Not because the answer was necessarily to sell, but because knowing what the property could be worth today is one of the inputs needed to make that decision.
For many South Shore owners, that may be the most useful place to start.
Run the Numbers Again
If you considered refinancing, selling, acquiring, or improving a property in the last 24 to 36 months and decided to wait because the environment made the numbers unattractive, it may be time to take another look.
Get a current opinion of value. Understand what financing is available today. Update the property’s NOI based on today’s rents, expenses, and occupancy. If a sale is on the table, understand what you would do with the proceeds. Then compare the actual options.
The answer may still be hold. That is a completely valid outcome.
But it should be a decision based on today’s numbers, not an assumption carried forward from two years ago.
That is the conversation worth having.
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Source: CBRE, Q2 2026 U.S. Capital Markets Figures.
