-
- March 3, 2026
- Insights
If I had to describe the 2025 real estate investment market in one sentence, I’d call it a maturity refinancing year.
To understand why, we have to go back a few years.
From 2019 through 2022, borrowing costs were historically low. Investors were acquiring aggressively, and in some cases building aggressively. In markets like Florida, high demand meant that pricing accelerated very quickly. In some instances, properties purchased in 2020 were worth multiples of their original acquisition price just a few years later.
At the same time, other markets saw heavy development but demand never materialized at the levels that investors expected. As a result, these markets saw excess supply accumulation and an uptick in vacancies. Owners began offering concessions to maintain occupancy, so cash flow didn’t always keep pace with valuations.
All of that set the stage for what we saw in 2025.
2025: The Year of Forced Decisions
By 2025, many of the loans originated during the low-rate years began to mature. However, market conditions had changed substantially. Now borrowers were faced with some tough decisions, and they had to make them quickly.
Many sponsors were forced to choose one of three paths:
- Sell the property if the deal no longer penciled at a higher cost of borrowing.
- Refinance at higher leverage if the cash flow supported it.
- Refinance at lower leverage if rent growth had not kept up with rising property values.
This created what I would call a forced decision-making market. Sponsors weren’t operating in a speculative environment anymore. Instead, they were reacting to maturity timelines and updated economic conditions.
At the same time, inflation began easing and interest rates came down significantly. I expect that shift to set up a very different market in 2026.
What This Means for 2026
If 2025 was about reacting, I believe 2026 could be about acting with intention.
As inflation moderates and rates trend lower, we’re moving toward a more predictable and sustainable market. That predictability creates opportunity.
At the beginning of the year, there is still a gap in many markets between what sellers are listing properties for and what buyers are willing to pay. I believe 2026 may be the year that connects those two dots.
And when that happens, something important occurs. You don’t get a distressed seller, you get a motivated seller. You don’t get a fearful buyer, you get a disciplined buyer. And you get a lender willing to lend.
When the buyer, seller, and lender are aligned, transaction volume increases and deals begin to move. That creates a lot of realized opportunity. I am extremely optimistic about what that environment could look like in 2026.
Why This Is Where Encore Finance Does Its Best Work
At Encore Finance, we perform best when markets are rational and risk is priced correctly.
As predictability returns, we’re able to bring what matters most to borrowers: certainty of execution.
We take pride in closing quickly, often in 30 to 45 days. Our entire team, from originators to underwriters to closers, works closely with sponsors and brokers throughout the process. We focus on finding solutions that fit the unique needs of each borrower and each project.
For me personally, what I enjoy most is solving problems. Investors come to us with a goal — maybe it’s refinancing, maybe it’s acquisition, maybe it’s something more complex — and we go to work structuring the right approach.
There’s no better feeling than that phone call at closing. Whether the transaction was straightforward or required creative structuring, earning a borrower’s trust and seeing the deal cross the finish line is what drives me every day.
Markets don’t need to be euphoric to create opportunity. They need to be rational.
Looking Ahead
If inflation continues to ease, rates stabilize, and pricing expectations align between buyers and sellers, 2026 could be a year of meaningful transaction activity.
I’m excited for what’s ahead, and I look forward to helping our borrowers navigate it.
If you’re evaluating acquisitions, refinancing options, or positioning your portfolio for 2026, I’d be happy to connect.
Send me a note at william@encorefinance.com.
