When Traditional Lenders Say ‘No’ — What’s Next for CRE Developers?

What do you do when your project is solid, your track record proven, but your financing partner just doesn’t get it?

That’s the reality many commercial real estate developers and investors in the lower mid-market are facing today. The ambition is there. The opportunity is clear. But traditional banks are pulling back, leaving a growing segment of the market underfunded and underserved. 

I’ve spoken to countless developers this year who’ve said the same thing: “We’re not asking for favors; we just need someone who sees the potential.” That’s the gap we’re focused on.

At OakNorth, this is exactly where we step in.

Built for a market overlooked by big banks

OakNorth is a U.K. bank founded by entrepreneurs, for entrepreneurs. Since launching in 2015, we’ve lent more than $17 billion to high-growth businesses, and in the U.S., we’ve lent more than $1 billion since July 2023.

We focus on lower mid-market loans between $3 million and $50 million, across sectors like multifamily, senior living, student housing, self-storage and more. In this segment, we see huge opportunities in experienced borrowers with strong visions, viable assets and the kind of agility and hunger that institutional capital providers often can’t support.

We’re not trying to be all things to all people. What we’re hearing from borrowers — whether they’re building in Brooklyn or repositioning in the Midwest — is that they want a lender who can match their pace and think like an operator. 

We’re here to serve borrowers who need a lender that’s fast, flexible and willing to engage with complexity, whether that’s structuring a note-on-note facility, navigating a repositioning or funding a ground-up development with a tight time frame.

Three deals that say everything

This year alone, we’ve closed a number of standout CRE transactions that underscore the gap we’re helping to fill.

These deals include $14.7 million to GoodHomes to convert a 13-story hotel in Silver Spring, Md., into 227 multifamily units. An ideal case of delivering much-needed attainable housing through adaptive reuse.

Meanwhile, $21 million went to Oak Funding to develop an eight-story mixed-use scheme in the South Bronx. The site will deliver 99 multifamily units and 7,700 square feet of commercial space, including a bike room, laundry facilities and shared rooftop terrace — all within walking distance of key MTA bus and train links.

Finally, S3 Capital received $79 million across two note-on-note facilities, supporting developments in New Jersey and Brooklyn — designed for a lender who understands both structure and strategy.

Our experience working with borrowers like S3 Capital and DAC Developments has shown us that fast, pragmatic decision-making is what makes the difference. 

What makes OakNorth different

We aren’t a traditional bank — and we’re not trying to be. Our entire approach is built on four fundamentals:

•Speed: We get to “yes” (or “no”) quickly and can move from agreement to drawdown in weeks, not months.

•Tailored structuring: Every deal is designed around the borrower’s needs, not a preset credit box.

•Access to decision-makers: Borrowers are invited to join credit committees, meet the key decision-makers and have visibility into how decisions are made.

•Entrepreneurial mindset: We understand growth, risk and the nuances of commercial real estate because we’ve built a bank from scratch.

Bringing our approach to more developers, nationwide

In March 2025, we announced the acquisition of Community Unity Bank in Michigan (subject to regulatory approval) — a key step in expanding our U.S. ambitions and enabling local deposit-taking to support our growing lending activities. While our initial U.S. lending efforts have been concentrated in the tristate area, our pipeline now spans the country. We’re actively looking for more developers and investors to support.

We’re also expanding our team on the ground in New York and beyond, because we believe that having the right people with the right local insights is critical to our model.

Looking ahead

Despite a complex macroeconomic environment, developers are still creating essential housing, revitalizing communities and unlocking long-term value. What they tell me they need isn’t flashy structuring. Rather, it’s speed, clarity and someone who actually listens.

That’s the role we’re proud to play. And it’s the kind of partnership we’re committed to delivering.

If you’re exploring financing options for your next project, we’d love to hear from you. Visit oaknorth.com, or email us at questions@oaknorth.com.