In today’s commercial real estate market, access to credit has become significantly constrained. Rising interest rates, tighter lending standards, and broader economic uncertainty are making it increasingly difficult for sponsors to finance acquisitions, fund developments, or refinance existing debt. For lenders—particularly bridge lenders, private credit funds, regional banks, and private investor groups—this environment presents both risks and strategic opportunities.

At our firm, we represent a range of lender-side clients navigating these tightening conditions. We’ve seen firsthand how traditional lending institutions have pulled back, creating a financing gap that alternative and bridge lenders are stepping in to fill. However, the decision to provide capital in this market must be backed by both business agility and strong legal infrastructure.

As conventional sources of financing become more selective, many borrowers are pursuing creative capital stacks to keep projects moving. This often includes preferred equity, mezzanine debt, or intercreditor arrangements—all of which require thoughtful structuring and protective documentation. In high-leverage or transitional deals, a clear and enforceable loan agreement is critical, not just for execution but for long-term asset protection. Key provisions—such as financial covenants, default triggers, and extension mechanics—must be tailored to reflect the volatility of today’s credit markets.

We’re also seeing heightened importance placed on diligence. In a volatile market, the borrower’s ability to secure takeout financing or meet business plan milestones can change quickly. For lenders, this makes strong representations and warranties, ongoing reporting obligations, and practical remedies essential. Legal strategies should aim not only to protect capital but to enable lenders to act decisively if market conditions or borrower performance deteriorate.

Despite the headwinds, we believe this market presents a compelling opportunity for lenders who are willing to engage with complexity. With careful legal planning and the right risk-adjusted approach, bridge lenders and private credit providers can play a pivotal role in keeping deals alive and creating value where others cannot.

Our team continues to advise lenders on how to structure, protect, and grow their portfolios in this evolving landscape. If your organization is navigating these challenges, we’re here to help.