Halfway through the year, the question we hear most from owners and sponsors is some version of the same one: do I move now, or do I wait? Here is how we are reading the market — and the framework we use to answer that question with clients.

The defining feature of this market is not a single direction but a wide dispersion. Strong assets with clear cash flow and credible sponsors are still attracting competitive capital. Weaker stories — thin coverage, hair on the title, a business plan that depends on rates falling — are being repriced hard or passed over entirely. The gap between the two has rarely been this visible.

Rates: the cost of waiting is now explicit

For most of the last decade, the cost of waiting was close to zero. That is no longer true. Carry is real, the forward curve gives no one a clean answer, and "we'll refinance into a lower rate next year" has stopped being a plan and gone back to being a hope. We are advising clients to underwrite to the rate they can lock today, then treat any improvement as upside — not to build a base case around a cut that may or may not arrive.

Credit availability: open, but selective

Capital is available. What has changed is the bar to access it. Lenders are scrutinizing coverage, sponsor track record, and the realism of the business plan more closely than they did two years ago. Banks have pulled back in places, and private credit has stepped into the gap — often with more flexibility on structure, at a price. For a well-prepared borrower, there are more types of capital at the table than the headlines suggest.

Underwrite to the rate you can lock today. Treat anything better as upside — not as the plan.

What this means if you're deciding whether to move

The owners doing well right now are not the ones who timed the bottom. They are the ones who came to the table prepared, structured deliberately, and ran a real process instead of accepting the first term sheet in front of them. A few principles we keep coming back to:

  • Separate the asset decision from the rate decision. A good asset financed at today's rate often beats a marginal asset you only liked at last cycle's rate.
  • Stress the plan, not just the entry. Test what happens if your refinance or sale slips twelve months. If the deal only works on a perfect exit, the structure is too tight.
  • Bring options to the table. Comparing a financing path against an equity raise or a sale — honestly, side by side — is how you avoid being steered into the only product someone happens to be selling.

None of this is a market call. We do not know where rates land in December, and neither does anyone selling you certainty about it. What we do know is that the clients who decide from a position of preparation — clear numbers, a tested plan, and a real understanding of their options — are the ones who get to act when the moment is right for them.

The views above reflect our reading of conditions as of the publication date and may change. Nothing herein is an offer to sell or a solicitation of an offer to buy any security, nor is it investment, legal, or tax advice. Past performance is not indicative of future results. See our Disclosures.