Capital markets: what corporate leaders should watch as markets gear up for 2026

The perspectives in this article stem from Chatham’s Capital Markets Trends and Strategies webinar, where Amol Dhargalkar, Reuben Daniels, and Mark Weiss explored the shifts, signals, and structural changes defining the path to 2026.

Why this matters now

Capital markets are shifting from crisis-era headwinds to steady progress, tighter spreads, and more financing choices. In our recent webinar, Managing Partner and Chairman Amol Dhargalkar sat down with Reuben Daniels (Head of Investment Banking) and Mark Weiss (Head of Real Estate) to unpack what that means for corporate leaders, sponsors, and real asset investors heading into 2026.

From headwinds to steady momentum

Reuben opened by noting how the tone of the market has changed. “For the past few years, the phrase I’ve been hearing most frequently is that we’re facing headwinds,” he said. “For the last six months, we’re starting to feel something very different, which I would describe as grinding higher.”

Equity markets have climbed roughly 20–30 percent since “liberation day,” while high-yield spreads have narrowed from 500 to 250 basis points. “That’s a real change in the economic environment,” Reuben added.

Mark agreed the cycle feels different. “Usually, you see easing during or leading into a recession,” he said. “Here, we have a pretty stable economy.” He noted that real estate financing has become more attractive as spreads and base rates have come in, drawing renewed attention from lenders and borrowers.

The curve conundrum: a U-shaped landscape

Reuben described today’s unusual U-shaped yield curve: “Short-term rates remain high, you see a dip in that two- to three-year sector, and then long rates are back to where short-term rates are.”

Tight spreads and abundant competition

Amid a shifting market landscape, competition among lenders has intensified. “We’ve seen a reemergence of all the different players—insurance companies, Fannie and Freddie, CMBS, commercial banks, and regional banks,” said Mark. “When you have that much competition, it typically drives spreads lower.” That resurgence has been accompanied by a recalibration of credit standards and valuations. Reuben observed that improved credit quality has reinforced investor confidence.

The reality across the commercial real estate (CRE) market is nuanced. Not all assets have declined so sharply, and many that have are not actively trading. Instead, investors are largely sitting on the sidelines, waiting for greater clarity before transacting. This selective repricing, paired with more disciplined underwriting, has introduced a degree of stability back into the market. In this context, today’s tighter spreads seem less anomalous and more reflective of a market finding its equilibrium, balancing renewed lender competition with a more deliberate approach to risk and valuation.

A K-shaped recovery takes hold

Reuben described a split recovery. “The ultimate K-shaped recovery right now is with data centers and digital infrastructure versus regular corporates and industrials,” he said.

Mark drew the same contrast in real estate: “In the office sector, there’s an enormous amount of leasing going on, but it’s typically in the A-class buildings. B office buildings are very challenging both in the ability to attract tenants and consequently to harness the capital markets.”

A structural shift in capital markets

Reuben observed that public and private markets are converging. “We’ve really seen a structural change,” he said. “Investors view the world through the lens of life being a discounted series of cash flows. There are more tools today than ever before, and I think those are here to stay.”

Data centers and digital infrastructure dominate

Digital infrastructure defined 2025. “There’s been about $100 billion of CMBS (commercial mortgage-backed securities) issued this year,” Mark said, and “Chatham alone has hedged more than $125 billion dollars of data centers.” He noted several deals exceeding $10 billion which, are rare outside large corporate take-privates. Reuben added, “One sponsor told us the bank market is euphoric,” underscoring strong appetite for the sector.

Competition between banks and private credit

Private credit remained front of mind. “Banks have really decided not to cede all the best business to private credit,” Reuben said. “They’re being aggressive on terms and flexibility.”

He described 2025 as “the first year that the empire strikes back,” with banks and private credit now in a “dead heat.” Banks have reasserted their presence in the market, moving aggressively to retain large, high-quality transactions that might otherwise flow to private credit. The narrowing of spreads in the broadly syndicated loan market has reinforced that momentum, and recent deals show how active both sides have become.

On one hand, transactions such as Keurig Dr Pepper and Sempra Infrastructure Partners demonstrate private credit’s capacity to raise multibillion-dollar financings across the capital stack. On the other, deals like Dayforce highlight how traditional lenders are pushing term loan B spreads to their tightest levels in years. In one recent transaction, bank financing achieved one of the lowest credit spreads on record, signaling how far banks are willing to go on pricing and flexibility to keep marquee deals in-house.

After several years of private credit dominance, 2025 is shaping up as a competitive race between banks and private lenders for market leadership.

Europe’s funding edge and a changing bank landscape

Amol turned to global markets, where Europe continues to offer a pricing edge. “Funding costs are about 120 to 160 basis points cheaper there,” Reuben said, “and companies with European assets are either funding or hedging into those currencies.”

He noted that bank behavior has flipped. “U.S. banks want funded assets and want to put capital to work,” he said, “while foreign banks do not. That’s a big shift.”

Amol reflected: “What was true yesterday doesn’t have to be true tomorrow,” to which Reuben added that the bank market “is a living, breathing thing.”

Currency moves reshape global strategy

According to Mark, clients, especially in Asia-Pacific, are refocusing on FX risk. “People are really starting to pay attention,” he said. “Four or five years ago it was a hundred yen to the dollar; now it’s north of one fifty. You could have hit your business plan perfectly and still made no money due to the weakness of the yen.”

He added that clients are increasingly hedging equity exposure as values rise. Reuben noted growing fund-level hedging, as global investors want currency-protected returns. Amol summed it up: “Real estate people want to focus on fundamentals. If they wanted to be FX traders, they’d be in a different business.”

Technology, preparation, and the value of early planning

Amol asked what practices best position clients for 2026. Reuben emphasized preparation. “We had done an enormous amount of prep work in advance,” he said of a recent transaction that faced a late-stage downgrade. “That preparation and strategic contingency planning is extremely important, being able to think about financing across a variety of different instruments simultaneously.”

Mark focused on exposure management and data. “Please don’t be overexposed to a moment in time,” he said. “We’re talking to clients who may have a large percentage coming due within a thirty-day period and discussing legging into trades rather than exposing themselves to moment-in-time risk.”

He added that accurate, secure data helps clients understand fee flows and lender relationships. Amol noted that integrating financing, hedging, and technology “lets clients cycle from strategy to execution and back to oversight seamlessly.”

Final takeaways for 2026

Amol closed by asking each for advice heading into the new year. Mark’s message: “Take advantage of what the market has to offer. Don’t wait for the last minute. And think about structure versus pricing—I’d much rather have a more flexible structure than the last basis point.”

Reuben added, “We started one transaction eighteen months in advance of the maturity. Starting early was key to being ready.” Then, smiling, he said, “Stay opportunistic, my friends.”

The Chatham difference

Independent advice, integrated execution, and technology that turns complexity into clarity. Or as Amol put it during the session, our job is to help clients “see the bigger picture and connect the dots” so they can act with confidence in 2026.

For the full discussion and additional detail, watch the replay or check out these quick key takeaways with Jason Peterson, Client Relationship Management.