Deciding to Sell or Refinance Your Commercial Property: Insights for 2026

As the commercial real estate (CRE) landscape evolves into 2026, many property owners are facing crucial decisions regarding their investments. Whether to sell or refinance a property is not merely a financial consideration but a strategic one, influenced by market dynamics and property performance. With increased resolution in CRE, understanding the timing and potential leverage in making this decision is paramount.

The Current State of the CRE Market

Studies indicate that 2026 will not usher in a broad-based rebound for commercial properties but will create a clearer distinction between high-performing assets and those facing challenges. Investing resources wisely in either selling or refinancing can lead to significant long-term benefits. Properties with sustainable cash flows and well-aligned capital structures are positioned to see renewed interest, while others may struggle.

When to Refinance: Timing is Key

Similar to navigating a complex maze, timing your refinance is critical. The recommendation is to engage the refinancing process well ahead of the maturity date, ideally starting conversations with lenders at least six months prior to that timeframe. This allows you to gather vital financial documentation, review property conditions, and even explore potential lenders while market conditions remain favorable. Factors influencing refinance timing include prevailing market rates, lender availability, and expected changes in lending policies.

The Selling vs. Refinancing Decision

Choosing to sell often revolves around achieving liquidity and capitalizing on favorable market conditions. On the other hand, refinancing may allow property owners to maintain ownership while potentially reducing monthly obligations or freeing up capital for future investments. However, it’s critical to evaluate your property’s performance, debt service coverage ratios (DSCR), and current competitive offers to make an informed decision.

Key Insights on the Impact of Capital Markets

Recent predictions suggest that capital processes in CRE will remain robust. Commercial mortgage-backed securities (CMBS) issuance is projected to stay strong, indicating that refinancing opportunities will flourish for well-positioned properties. In this context, leveraging debt results in actionable flexibility, especially for those aiming to navigate the transitional landscape of commercial lending.

Moving Forward: Your Next Steps

As we head into 2026, property owners should take a proactive approach when making decisions about selling versus refinancing. Analyze market trends, stay informed about lending guidelines, and engage with financial advisors who can guide you through this complex decision-making process. Understanding market conditions, recognizing your property’s potential, and being prepared to act can mean the difference between missing opportunities or capitalizing on them.