How Today's Borrowers Are Moving Projects Forward With Private Lending

While the future of the U.S. economy is uncertain, confidence in commercial real estate lending remains strong. 

The Mortgage Bankers Association expects commercial and multifamily mortgage borrowing and lending to rise to $583B in 2025, a 16% increase from 2024.

Streit Lending principal Auriel Streit is seeing that rise in demand firsthand, not only in the number of deals but in the quality as well. 

“The deals we’re seeing in 2025 are higher-quality,” Streit said. “Buyers and sellers are more serious, more certain.” 

Streit Lending is experiencing success in an otherwise turbulent market because it is a private lending firm. While traditional bank lenders have seen their underwriting change dramatically due to interest rates, tariffs, materials costs and all of the other unknowns impacting CRE, private lenders like Streit can move quickly without the same barriers.  

Streit Lending is a family-run office led by Streit and his siblings, Noah Streit and Nava Streit Raziel. They can provide borrowers with direct access to private capital and aren't beholden to investors. 

“When you work with us, you’re working directly with the decision-makers,” Auriel Streit said. 

Banks are avoiding complicated CRE deals, and deals that banks are considering still leave borrowers in limbo for a relatively long period, he said. Bank loans can remain in underwriting for months, during which the deal closing is entirely out of the borrower’s hands.

Banks are sensitive to the market fluctuations that appear to be a regular occurrence, he said. Lengthy approval timelines give banks plenty of outs should they become uncomfortable with the market.

“There's just so much uncertainty as to whether or not banks are going to be able to close deals right now,” he said. “If a purchase agreement has a drop-dead closing date and the bank backs out at the last minute, then what are the borrower’s options?”

Streit Lending underwrites its loans differently than traditional banks, Streit said. The family office doesn't have debt service coverage or debt-to-income ratios to follow. Instead, Streit’s main goal is to get comfortable with a borrower and create a relationship based on mutual trust and honesty.

“We are nimble and we are flexible,” he said. “If there's an issue with the borrower, we can find ways to work around that. If there are tax issues, we can work around them. Our flexibility spans a wide spectrum, but if borrowers are not upfront about the problems when we initially underwrite a loan, we are a lot less motivated to work through those types of issues.”

Streit Raziel said that even if a borrower has a history of defaults or a troublesome past that could lead banks to turn down a loan, Streit Lending can work through those complications. The firm’s main focus is feeling comfortable working with a borrower as they stand, rather than basing loan qualification on past issues. 

“We can think outside of the box and be creative with all of our deals,” Streit Raziel said. “We want to work with you, we want to get deals done, and we're always motivated to find solutions.”

An example of this solution-oriented approach involved a large industrial property that was partially occupied by a cannabis tenant. Auriel Streit said that in addition to the cannabis tenant, the property had environmental issues, two items that are automatic passes for private lenders and banks. Unlike most lenders, Streit lends against cannabis real estate regularly and can work through environmental issues after thoroughly reviewing the property reports and remediation budget. 

“In situations like this, we will just hold back the cost included in the remediation budget from the total loan amount and release those funds as needed to complete the project,” he said. “That’s not something many lenders will do, but we will as long as we are comfortable with the borrower and underlying real estate.”

He added that Streit offers midconstruction loans, as it did when a borrower who was building eight townhomes had 25% of the project complete when he came looking for a loan so he could recapitalize and buy other properties.

A lot of lenders will pass on midconstruction loans because of potential mechanic’s lien issues, which are legal claims that can be filed against a property by those who haven't been paid for work or materials. In California, contractors, subcontractors and suppliers generally have up to 90 days from labor completion to file a mechanic’s lien, and it takes priority over any loan made in that period. If that were to happen, a midconstruction lender would end up subordinate to the mechanic’s lien. 

Streit, however, is willing to take the risk that comes with midconstruction loans, assuming the family office is comfortable with the underlying asset, the borrower’s qualifications and obtaining the proper title insurance.  

“Our underwriting process allows us to take on a certain level of risk that both banks and other private lenders may shy away from,” Streit said.

Streit Raziel said it is clear there are challenges ahead, given the current economic climate. But she is confident that Streit Lending’s flexibility, trust-driven lending model and general philosophy will allow it to clear any hurdles that present themselves. 

“We may be headed into uncharted territory for CRE lending,” she said. “However, we have the vision and the drive to get deals done.”

This article was produced in collaboration between Streit Lending and Studio B. Bisnow news staff was not involved in the production of this content.

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