Banks are applying tougher standards to commercial real estate borrowers as higher interest rates and economic uncertainty sharpen scrutiny of property lending. The Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices, released during the week of November 5, 2026, found tightening across all commercial real estate loan categories, including construction, land development and multifamily. The shift comes as landlords prepare for loans to mature in 2026 and 2027, with borrowing costs substantially above those prevailing several years ago.

The survey drew responses from 61 domestic lenders and 18 U.S. branches of foreign banks, and showed that demand for commercial real estate loans weakened over the same period. Those findings sit alongside a marked change in the interest-rate backdrop: the 10-year Treasury yield exceeded 5% in October, reaching its highest level since 2002 amid concerns about debt, before retreating to 4.8%. The survey does not establish that the decline from that peak was followed by an easing of bank lending standards for property borrowers.

Commercial lenders are increasingly working on the assumption that interest rates will remain elevated, while inflation and the war in Iran weigh on the U.S. economy. For borrowers, the distinction between a retreat in Treasury yields and an easing of credit standards is important. The survey describes banks raising their requirements for lending, a separate measure from the level of Treasury yields. Its findings therefore point to a financing challenge that extends beyond the level of interest rates alone.

Read more: Ghana’s housing investment runs up against finance and land barriers

The breadth of the tightening is also significant. Construction, land development and multifamily borrowers all face a more demanding lending environment, rather than the restrictions being confined to one of those categories. That does not establish that every bank is taking the same approach to every application. It does, however, show that the reported shift is broad across commercial real estate lending. The survey’s account offers no indication that one of those categories has been spared the move towards tighter standards.

Weaker demand adds another dimension to the results. Banks reported both a higher bar for credit and less appetite for commercial real estate loans during the same period. These are separate developments: tougher standards describe lenders’ willingness to extend credit, while demand describes borrowers’ interest in obtaining it. The findings should not be read as evidence that every reduction in borrowing reflects a rejected application. Rather, they show restraint on both sides of the bank-property lending relationship as financing conditions become more difficult.

For landlords approaching maturity dates, the immediate issue is the contrast between current borrowing costs and those available several years ago. Many are preparing for loans coming due in 2026 and 2027 at much higher interest rates. Against that background, stricter bank requirements create a further consideration for borrowers seeking replacement financing. The maturity schedule gives the lending survey practical importance: a weaker overall appetite for new property loans does not remove the refinancing needs associated with existing debt reaching the end of its term.

Read more: Nasdaq falls 5.5% on Thursday as AI-stock sell-off spreads to Asia

Private equity has entered the lending market, providing a counterpoint to the tightening reported by banks. Its involvement means bank credit is not the only financing channel in the picture. Yet the Fed’s findings also underline a constraint on treating private lending as wholly separate from the banking system. Banks reported tighter standards for loans to nondepository financial institutions, a group that includes business and mortgage credit intermediaries as well as private equity funds. Those institutions are therefore also encountering more restrictive bank lending.

Demand from that group moved in the opposite direction to demand for commercial real estate loans. Banks reported increased borrowing interest among nondepository financial institutions, particularly from small business and private equity funds. They attributed the increase primarily to working capital requirements, liquidity needs and greater refinancing needs. The contrast matters because it distinguishes weaker demand for commercial real estate loans from stronger financing needs elsewhere. It also shows that tightening standards can coincide with rising demand, rather than necessarily reflecting less interest in borrowing.

The survey’s commercial and industrial lending findings offer another distinction. Banks tightened standards for small firms, but not for large or middle-market firms. The results therefore do not describe an identical response across business lending: borrower size mattered in commercial and industrial credit, while the reported commercial real estate tightening extended across all loan categories. That difference supports a more measured reading than a claim of uniform retrenchment throughout bank lending, even as property borrowers face broadly tougher requirements.

The next test is how those requirements interact with the approaching property loan maturities. Landlords must contend with higher borrowing costs, while private equity lenders operate alongside a banking sector that is also tightening credit to financial intermediaries. The Treasury yield’s retreat to 4.8% provides some contrast with October’s peak, but the Fed survey does not establish that lending standards are about to ease. For now, its central message is that commercial real estate borrowers face greater scrutiny as refinancing needs remain.