Office Building Financing 2026: Current LTV Rates and Lender Terms
Terrydale Capital
Jan 13, 2026 17 Min read
Are Lenders Still Financing Office Buildings in 2026? What You Need to Know About LTV and Terms
The office market isn't what it used to be. That's not news to anyone who's walked through a half-empty downtown building or read about another company announcing permanent remote work. But here's what matters if you own office space or want to buy it: Yes, lenders are still financing office buildings in 2026. The question isn't whether they'll lend. It's under what conditions.
Let's talk about what's actually happening in the market right now.
The Office Lending Landscape Has Changed
Five years ago, getting office building financing was straightforward. Strong cash flow? Good location? You'd see loan-to-value ratios at 75% or even 80% without much pushback. Lenders competed for quality office deals.
That world is gone.
Today's office lending market operates on a different set of rules. Lenders didn't stop financing office properties. They got selective. Very selective. And they adjusted their terms to reflect the new reality of how people work.
Think about it this way: If you owned a restaurant and half your customers stopped coming in, you'd change how you operate. You wouldn't close. You'd adapt. That's what office lenders did.
What LTV Ratios Look Like Now
Here's the reality. Most traditional lenders are offering 60% to 65% LTV on office properties in 2026. Some are willing to go to 70% for exceptional properties, but you'll need to check several boxes to get there.
What makes a property exceptional right now? High occupancy rates above 85%. Long-term leases with credit tenants. Class A buildings in strong markets. Recent capital improvements. Diverse tenant mix. Properties that show they can attract and retain tenants even when remote work is an option.
Let's look at a real example. A 120,000 square foot office building in Denver with 90% occupancy, average lease term of 4.5 years, and tenants including regional banks and healthcare companies recently secured financing at 68% LTV. The building had updated HVAC systems, modern common areas, and parking ratios that met current demand. That's what it takes to hit the higher end of today's LTV range.
Compare that to a similar-sized building in the same market with 65% occupancy and shorter lease terms. That borrower got quoted 55% LTV. Same city. Same property type. Different fundamentals.
The spread between what strong properties can achieve and what struggling properties can access has widened significantly.
Life Insurance Companies and Office Loans
Life insurance companies remain active in office lending, but they've always been conservative. Now they're even more so. You're typically looking at 55% to 60% LTV from life companies in 2026.
Why do borrowers still pursue life company loans at lower leverage? The terms. These loans often come with 10-year fixed rates, partial interest-only periods, and longer amortization schedules. If you can bring more equity to the deal, the overall cost of capital might work better than higher-leverage options with shorter terms and higher rates.
A medical office building in Austin recently closed a life company loan at 58% LTV with a 10-year fixed rate and five years of interest-only payments. The borrower brought more cash to closing but locked in predictable payments for a decade. For stable, long-term holds, that math works.
CMBS Loans Are Still in the Market
Commercial mortgage-backed securities lenders haven't disappeared from office lending. They've adjusted. CMBS loans for office properties in 2026 typically max out around 65% LTV, though some programs will stretch to 70% for strong properties.
The challenge with CMBS isn't usually the LTV. It's the debt service coverage ratio requirements. Most CMBS lenders want to see 1.30x to 1.35x DSCR for office properties now, compared to 1.25x a few years ago. That higher coverage requirement effectively reduces how much you can borrow even if the LTV suggests more room.
Here's what that means in practice. Say you have a property worth ten million dollars. At 65% LTV, you'd expect a 6.5 million dollar loan. But when the lender underwrites to 1.35x DSCR based on your net operating income, they might only approve 5.8 million. The property value supports more leverage, but the income doesn't.
Regional and Community Banks
Smaller banks often have the most conservative approach to office lending right now. Many regional banks are offering 50% to 60% LTV, and some have effectively stopped making office loans altogether, especially for larger buildings or downtown properties in secondary markets.
But here's where relationships matter. If you have an existing banking relationship and strong personal guarantees, you might find more flexibility. A client with multiple properties financed through the same regional bank recently secured 62% LTV on an office building purchase when that same bank was quoting 55% to new borrowers.
Community banks also tend to favor smaller office buildings, typically under 50,000 square feet, and owner-occupied properties. If you're buying a building where you'll occupy 40% or more of the space, you'll find more lenders willing to work with you.
Medical Office Buildings Get Better Treatment
Not all office space is treated equally. Medical office buildings, especially those on hospital campuses or with direct hospital affiliations, still command better loan terms than traditional office space.
Medical office financing in 2026 typically runs 65% to 75% LTV, depending on the tenant mix and location. The healthcare industry's growth and the essential nature of in-person medical services make these properties less susceptible to remote work trends.
A medical office building in Charlotte with four floors of specialists and hospital-affiliated practices closed a loan at 72% LTV last quarter. The building had 96% occupancy and weighted average lease term of seven years. Those numbers are rare in traditional office but achievable in medical office with the right fundamentals.
Interest Rates and Loan Terms
LTV isn't the only story. Interest rates and loan terms matter just as much to your overall financing cost.
Fixed rates for office buildings in 2026 range from 6.25% to 7.75% for five to ten-year terms, depending on leverage, property quality, and borrower strength. Bridge loans and shorter-term floating-rate options typically run from 7.5% to 9.5%.
Most lenders have shortened their comfort zone on loan terms. Ten-year fixed-rate office loans still exist but are harder to find unless you're working with life insurance companies or dealing with exceptional properties. Many banks prefer five or seven-year terms with shorter amortization periods.
The days of 30-year amortization on office properties have largely disappeared except for owner-occupied scenarios. Most loans now amortize over 20 to 25 years, putting more pressure on monthly debt service.
What Lenders Want to See
Getting favorable terms on office building financing in 2026 comes down to checking specific boxes. Lenders want occupancy above 80%. They want lease term of at least three years average remaining. They want diverse tenants so one vacancy doesn't crater your income. They want markets showing job growth and population stability.
They're also looking harder at your plans. Will you make capital improvements? How will you attract and retain tenants? What's your leasing strategy? These questions weren't as critical when office demand was strong and tenants had fewer options.
Documentation requirements have increased too. Expect to provide detailed rent rolls, lease abstracts, trailing 12-month financials, capital expenditure histories, and market analyses. Lenders want to see you understand your market and have realistic projections.
The Refinancing Challenge
Here's where many office building owners face real pressure. Properties purchased or refinanced between 2018 and 2022 often carried 75% to 80% LTV. Those loans are maturing. And when they do, borrowers discover that values have declined and lenders won't refinance at the same leverage.
A property that was worth fifteen million dollars in 2021 might appraise at twelve million today. Your original 75% LTV loan of 11.25 million now represents 94% of current value. No lender will refinance that at anywhere close to the current balance. You'll need to bring cash to closing or sell.
This refinancing gap has created opportunities for buyers with equity. Properties are trading at discounts because owners can't refinance their maturing debt. If you have capital and can wait out the current cycle, this might be the best time to buy office buildings in years.
Alternative Lenders and Creative Solutions
When traditional financing doesn't work, some borrowers turn to debt funds, mezzanine lenders, or preferred equity structures. These options cost more but can bridge gaps when bank financing falls short.
Debt funds might lend up to 70% LTV on properties where banks stop at 60%, but you'll pay 10% to 13% interest rates. Mezzanine loans can provide additional leverage behind senior debt, typically at 12% to 15% rates. Preferred equity sits behind all debt and costs even more but doesn't require monthly payments in some structures.
These tools work for specific situations. Bridge financing while you lease up space. Value-add renovations where you need more capital upfront. Buying from distressed sellers at prices where the numbers work even with expensive financing that you'll refinance later.
Should You Finance an Office Building in 2026?
That depends entirely on the specific property and your business plan.
Office buildings with high occupancy, long leases, and strong markets can still secure reasonable financing terms. You'll bring more equity than you would have a few years ago, but the deals can work. Properties in growth markets, especially those near transit, amenities, and housing, perform better than isolated suburban office parks.
Buildings that offer flexibility—spaces that can convert to life science, medical, or mixed-use—have more appeal to lenders and buyers. Adaptive reuse potential adds value in a market where traditional office demand faces headwinds.
But if you're looking at a Class B building in a declining market with rising vacancy, recognize that financing will be expensive and difficult. That doesn't mean you can't make money. It means the returns need to justify the higher cost of capital and execution risk.
Getting the Right Financing for Your Office Property
Every office building deal is different. Location matters. Tenants matter. Lease terms matter. Capital needs matter. Your experience matters. The lender you choose matters.
Working with a commercial mortgage advisor who understands the current office market can make the difference between getting quoted 55% LTV at 8% and securing 68% LTV at 6.75%. We talk to lenders every day. We know who's lending on office properties, what terms they're offering, and what they need to see in your deal.
If you're looking to purchase, refinance, or need capital for an office building, we can help you navigate the current lending environment and find the right financing solution.
Partner With Terrydale Capital for Your Debt Financing Needs
When it comes to debt financing, understanding the right timing, process, and options is crucial. At Terrydale Capital, we provide a comprehensive range of commercial loan solutions tailored to meet your business's unique needs.
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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.
