Commercial Real Estate Loans with Family Offices (2026 Guide)
Terrydale Capital
Dec 29, 2025 18 Min read
Commercial Real Estate Loans with Family Offices: How They Work in 2026
Commercial real estate is not a 30‑year fixed mortgage on a house.
It’s a moving thing. Cash flow changes. Tenants leave. Rates reset. Roofs leak. And the plan often depends on time: “We’ll fix it up, lease it, then refi.”
That’s why the capital behind commercial real estate loans matters so much.
For decades, most borrowers defaulted to banks, life companies, and big debt funds. That still happens. But one group has gotten louder in the room:
Family offices.
What is a family office and why family office lending matters now?
A family office is a private firm set up to manage the wealth of an ultra-wealthy family. Some serve one family (single-family office). Some serve more than one (multi-family office). They often handle investing, tax, estate planning, and a lot of other day-to-day wealth tasks. Wikipedia+1
So why are family offices showing up in commercial real estate lending?
Because they can.
Banks have rules. They have regulators. They have tight credit boxes. In riskier moments, they pull back fast.
Family offices don’t work like that. Many can move quicker and shape a deal around the asset and the sponsor instead of forcing it into a standard product. Industry reporting has also pointed to family offices filling gaps left by more traditional lenders, including in value-add and construction-focused private credit. CRE Daily+1
Here’s the key shift in plain words:
When the “easy money” lane narrows, flexible capital becomes more valuable.
And family office capital is often flexible by design.
How family office commercial real estate loans are structured
Family offices don’t all lend the same way. Some want simple senior debt. Some want something that acts like debt but pays like equity. Some want direct ownership.
But most “family office lending” in CRE tends to land in a few buckets.
Senior debt and first-lien loans from family offices
This is the closest match to a bank loan: a first mortgage secured by the property.
A family office might do this when:
the asset is stable (or close to it),
the sponsor has a track record,
the downside is clear (what happens if the plan slips).
Example:
You buy a small industrial building at 70% occupancy. It’s a good location, but the leases are messy. A bank wants it at 90% leased with clean trailing numbers. A family office might underwrite the plan, give you senior debt, and price the risk instead of rejecting it.
Family office bridge loans for transitional properties
This is where family offices are showing up more often: bridge financing for a property that is “in between.”
Not broken. Not perfect. Just mid-story.
That might mean:
a value-add multifamily deal with unit turns,
a retail center with one anchor vacancy,
an office-to-resi conversion concept,
a construction or heavy rehab timeline that needs patience.
Trade coverage has pointed to family offices moving into CRE debt strategies focused on value-add and construction loans, and taking on deals that traditional lenders are less eager to touch. CRE Daily
Example:
A sponsor buys a tired 80-unit multifamily property. Half the units need work. Rents are below market. The plan is 18 months: renovate, push rents, stabilize, then refinance into agency or bank debt. A family office bridge loan can fund that gap.
Rescue capital, private debt, and “creative” parts of the debt stack
When a deal is stressed, or just unusual, family offices sometimes step in with:
rescue capital,
bridge lending,
private debt solutions.
Both RSM and Wipfli describe family offices as an alternative capital source that can provide flexible funding (including rescue capital and bridge/private debt) as traditional channels get constrained. RSM US+1
This is also where you’ll see structures like:
preferred equity,
mezzanine debt,
participating debt,
bespoke covenants tied to the business plan.
Not every family office does this. But the ones that do can be very useful when timing matters more than perfect “checkbox” metrics.
What family offices look for in a commercial real estate borrower
Want the blunt truth?
A lot of family offices don’t want to “be your lender.” They want to back a plan they understand, with people they trust, with a downside they can live with.
So what do they look at?
1) Sponsor quality and execution ability
They want to know:
Have you done this before?
Do you have the team to do it again?
Do you know where deals fail?
Example:
Two sponsors pitch the same value-add deal. One has done five similar rehabs and can show before/after numbers. The other has a great slide deck but no track record. Family office capital often follows the first sponsor.
2) A real plan (not a hope)
They’re listening for specifics:
What CapEx gets spent first?
What is the lease-up plan?
What’s the timeline?
What happens if rents flatten for 12 months?
3) Downside protection
Family offices are often “patient,” but that doesn’t mean careless.
They still want:
a sensible basis,
a clear exit path,
a margin of safety.
4) Alignment
This part gets missed.
Many family offices invest with long-term goals in mind: wealth preservation, steady returns, and family legacy thinking. RSM US+1
So if your pitch is “we’ll flip it in 9 months and take max leverage,” you may be talking to the wrong group.
Pros and cons of family office lending vs bank commercial real estate loans
Family office lending can be great.
It can also bite you if you don’t know what you’re signing.
Here’s the clean tradeoff.
The upsides of family office commercial real estate loans
Speed
Some family offices can move faster than institutional credit platforms, especially when the thesis is clear and the sponsor is known. CRE Daily
Flexibility
They may structure around the deal, not around a rigid product box. This is why they can fill gaps when traditional lenders step back. RSM US+1
Creativity in transitional deals
Bridge, rescue, private debt—this is a known lane for many family offices right now. Wipfli+1
The downsides (yes, there are downsides)
Pricing may be higher than a bank
Flex costs money. If you want fast close + transitional risk + fewer boxes, expect pricing to reflect that.
Terms can be bespoke (which means: read everything)
A custom deal can be great. Or it can hide sharp edges:
cash management rules,
recourse,
extension fees,
performance tests.
Relationship risk
You’re not dealing with a faceless institution. You’re dealing with people.
That’s good when things go sideways and you need a rational partner.
But it’s bad if expectations were fuzzy at the start.
How to win family office capital for your next commercial real estate loan
What’s the fastest way to lose a family office’s interest?
Send a sloppy package.
Family office lenders and investors see plenty of “almost” deals. The ones that stand out are simple, tight, and complete.
Here’s a practical checklist.
Build a “family office ready” loan package
Include:
One-page deal summary (the “why this wins” page)
Sources and uses
Rent roll + trailing financials (and explain any weirdness)
CapEx budget with scope (not just a round number)
Timeline with milestones
Exit plan (refi, sale, takeout lender assumptions)
Sponsor bio + track record (deal list with outcomes)
Example:
If DSCR is weak today because you’re renovating units, say it plainly. Then show the math at stabilization. Family offices don’t hate risk. They hate surprises.
Match the deal to the right kind of family office
Some family offices prefer:
core / stabilized income,
long holds,
low drama.
Others like:
opportunistic deals,
complex transitions,
private credit with strong yield.
Knight Frank’s Wealth Report 2025 (via its “Knight Frank 150” family office survey) notes that 44% of surveyed family offices are looking to expand exposure to commercial property over the next 18 months. Knight Frank Content
That’s a big pool of interest.
But it’s not one pool. It’s many small ones. You still have to matchmake.
Set expectations early
Ask and answer the hard questions up front:
Is there recourse?
What are extension options?
What happens if we miss the lease-up pace?
Are there cash traps?
Who approves major changes to the plan?
Don’t wait until the term sheet is “almost final.”
That’s where bad deals are born.
Why work with a commercial real estate loan specialist for family office lending?
Family offices can be a great fit. But they are not always easy to reach. And they don’t all look at the same deals.
A specialist in commercial real estate loans helps with two things that matter more than people think:
Access: introductions to real capital that is active now
Structure: shaping the ask so it fits what that capital actually wants
Terrydale Capital, for example, positions its Family Office services around customized CRE financing and loan structuring aligned with longer-term strategies. Terrydale Capital
And if you look at how they describe their broader platform, they emphasize relationships with banks, lenders, and family offices to source competitive financing. Terrydale Capital
You don’t need that exact firm. But you do need that function: someone who knows how to place the deal.
Because in this market, the difference between “funded” and “stuck” is often one call.
Market context: why family office CRE lending matters in 2026
A fair question is:
Is this just hype? Or is it real?
It’s real—and it lines up with what multiple sources are saying:
Family offices are stepping further into CRE deals, including debt strategies tied to value-add and construction lending.
Advisory firms describe family offices as rising alternative capital sources as traditional channels get constrained, including the use of rescue capital, bridge lending, and private debt.
And Knight Frank’s 2025 report signals meaningful intent to expand exposure to commercial property (again: that 44% figure).
Also worth noting: the Wealth Report text points out the obvious pressure point—debt costs are higher than many would like, and the pace of interest rate cuts is uncertain.
When debt is expensive and less predictable, capital that can be patient and flexible becomes more useful.
That’s the opening family offices are walking through.
FAQ: commercial real estate loans with family offices
Are family office CRE loans cheaper than bank loans?
Often, no. If a deal is bankable, banks usually win on rate. The family office win is usually speed, flexibility, and willingness to fund “in between” assets—not the lowest coupon.
Do family offices require recourse?
Sometimes. Sometimes not. It depends on the office, the deal, and the sponsor strength. Don’t assume either way—negotiate it early.
Will a family office fund construction financing?
Some will, especially if the sponsor has a strong record and the plan is clear. Trade coverage has highlighted family offices moving into private credit strategies that include construction-focused lending.
How do I approach a family office for a commercial real estate loan?
Warm intro beats cold outreach. Your best path is usually:
your broker,
your attorney,
your CPA,
a lender who already works with them,
or a platform that can place debt with family offices.
Then show up with a clean package and a clear ask.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
