Welcome back to Exit & Equity.

This week we are getting into why your operating experience means nothing to lenders in 2026 and what you can actually do about it.

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Details below. Then we get into it.

Earlier this year, I started stress-testing our positioning ahead of upcoming refinancing conversations. I wanted to understand what lenders actually want to see before I walked into those meetings, not after.

So I pulled our numbers. University is sitting at 89% occupancy, zero delinquencies, and generating $2,800/month more in cash flow than our Edgefield property, which is at 94% occupancy. By any operational measure, University is the stronger asset.

Then I started calling loan officers to understand how they'd see it.

What I found changed how I'm thinking about the next two years of our portfolio.

The definition of "experienced operator" has fundamentally shifted since 2023, and most independent operators haven't recalibrated their positioning, documentation, or strategy to match what lenders actually want to see today. That gap - between what we think proves experience and what lenders now demand - is the difference between 6.5% debt and 8.5% debt. Between getting term sheets and getting ghosted.

Here's the paradox: there's more capital available for commercial real estate than we've seen since early 2023, but it's flowing to a smaller pool of sponsors than ever.

The Mortgage Bankers Association reported CRE originations jumped 30% in Q4 2025 vs. the prior year. The Fed's Senior Loan Officer Survey from January showed only 9% of banks still tightening standards, down from 67% in April 2023. Private credit now represents 24% of CRE lending, up from 10% a decade ago, and they're actively hunting deals.

Capital is abundant. Access is not.

What changed isn't the money. It's how precisely lenders define who qualifies for it. If your track record was built entirely between 2019 and 2022, you're carrying invisible credibility debt that's costing you 50-200 basis points on every loan you close.

For years the informal standard was simple: complete three comparable projects and you're experienced. Three self-storage acquisitions? Welcome to the institutional lending table.

That rule died somewhere between 2022 and 2024. Most operators haven't noticed.

Lenders watched sponsors struggle with floating-rate debt they should have refinanced earlier. They saw deals underwritten in 2021 at 3.5% cap rates suddenly underwater when rates hit 7%. They learned that an operator with five successful deals, all closed in the easiest lending environment in a generation, might not know how to execute when NOI compresses or a market gets oversupplied.

Now they use "experience" as a proxy for something more specific: can you execute when things go sideways?

After those conversations, I reverse-engineered what separates operators accessing 6% debt from those stuck at 8.5%. It comes down to five things and most operators are failing to document all of them.

Geographic diversification used to signal sophistication. Now it signals lack of focus. Lenders want proof you understand a specific market well enough to navigate it when conditions deteriorate, not just when everything is going up.

The test: Can you explain the last three years of new supply, street rate movement, and absorption in your primary market without looking anything up? If not, lenders assume you're running on broker intel, not real market knowledge.

Meeting the minimum net worth threshold is table stakes. What lenders probe now is whether your capital is actually accessible. Net worth tied up in retirement accounts and personal real estate with no active portfolio signals capital constraint even if the number technically qualifies.

Can you wire $150K to cover an unexpected capex item in 48 hours? Or does that require unwinding partnership structures? Operators with dedicated reserve accounts earmarked for capital calls get better rates. In this environment, conservative operators win.

This is the silent killer for operators who financed in 2021-2022. Lenders are explicitly asking: when rates spiked, what did you do? Did you proactively refinance to lock in certainty, or did you float and hope for Fed cuts?

The narrative they're constructing is simple: if you didn't see rate risk coming or didn't manage it, in the last cycle, how will you handle the next one? Proactive debt decisions you made two years ago are now credibility signals. Document them.

Lenders now evaluate the ecosystem you've built, not just your deal count. Do you work with the same vendors, contractors, and managers repeatedly or do you piece together new relationships project by project to save a few points?

Operators who have built repeatable systems and long-term relationships demonstrate they're building a platform. Operators who optimize every transaction individually signal they're still running a collection of one-off deals. In self-storage especially where management complexity is real, showing you've actually solved it separates you from operators who just say they have.

An operator with five facilities in one market carries more credibility for a sixth deal in that market than an operator with eight facilities spread across eight states. Concentrated operators understand supply dynamics, tenant behavior, and local broker relationships in ways diversification can't replicate.

The framework lenders expect: prove depth in a primary market first, then expand to adjacent markets with similar characteristics. Jumping straight to multi-market diversification signals lack of strategic discipline, not sophistication.

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Here's the conclusion I keep coming back to: the gap between what a well-documented, cycle-tested operator can access and what an early-stage or poorly-documented operator must accept has widened since 2022 and it's not resetting.

When the next rate cut cycle arrives, operators with clean credibility profiles will see debt at 5.0-5.5%. Everyone else will see 6.5-7.5%. The spread persists regardless of overall market conditions.

Waiting for "better markets" is a losing strategy if your documentation doesn't match the 2026 standard. Market conditions will improve. Lender standards won't reset to the 2015-2020 baseline.

Treat your experience profile like an asset that needs active management. Document your market knowledge. Maintain visible reserve accounts. Make proactive debt decisions you can explain. Build repeat relationships with professional vendors.

The operators doing that work now will access cheaper capital in the next cycle than most of their competitors will even know is available.

Most operators walk into capital conversations with a deal summary and a handshake. The ones getting 6% debt walk in with a documented platform.

After stress-testing our own positioning this year, I built what I now call an operator certification package. A set of documents that go well beyond what lenders ask for and far beyond what most operators bother to maintain. It's not complicated. It's just disciplined. And the ROI is absurd: 50-200 basis points in rate savings on a $3M loan is $15,000-60,000 per year. We've saved approximately $140,000 in financing costs over 18 months with this approach.

Here's the exact framework. Initial build is 8-10 hours. Quarterly updates are one hour. That's it.

For each completed or in-progress project, build a one-page summary covering:

📋 Project basics — asset class, market, acquisition price, total capital deployed, acquisition and stabilization dates, current status

💳 Financing executed — lender, loan amount, rate structure, term, any modifications or refinancing, current payoff status

📊 Operational metrics — unit count or square footage, rent and occupancy achieved vs. underwritten, operational challenges and how you resolved them, year-over-year rent growth

🏦 Capital structure — equity sources, IRR achieved or projected, LP capital raised, any capital calls

🚪 Exit strategy and outcome — planned vs. actual hold period, sale price or refi value, IRR vs. initial underwriting

🤝 Key partners — property manager, GC, advisors, capital partners, with notation of repeat relationships

🗺️ Market conditions — what was happening in your market during acquisition and exit

💡 Key lessons — what you learned that changed how you operate

The lesson documentation piece is what most operators skip and it's the most valuable part. Our Aiken facility is sitting at 89% occupancy and generating $2,800/month more than University, which is at 94%. Documenting that observation, and the pricing logic behind it, tells a lender more about how we actually operate than any occupancy number alone could. That kind of self-awareness on paper is what separates operators who've built a platform from operators who've just gotten lucky.

Tools: Canva for formatting, Notion or Airtable for data tracking.

If you're operating across multiple markets, identify your best-executed deal and strongest relationship ecosystem. Make that your anchor market. Then write a single paragraph you'll use in every capital conversation.

The structure: what you specialize in, how long you've been there, what market conditions you've operated through, who you know, and where you expand opportunistically.

Ours: "We specialize in university-adjacent self-storage in secondary Southeast markets. We operate with a data-first approach, tracking revenue per occupied unit, pricing efficiency, and demand signals at the facility level in ways most independent operators don't. We've built relationships with regional property management firms and local lenders, and we opportunistically pursue tertiary markets within 200 miles of university anchors when cap rates exceed our 8% minimum."

That shift — from "we look at deals in multiple markets" to "we're specialists in X" — changes how lenders perceive you immediately. You go from generalists competing on price to specialists with defensible knowledge.

Write down how you actually make decisions. Two to three pages covering:

⚙️ Underwriting minimums — cap rate floors by market type, occupancy stress-test assumption, capex reserve requirement. (Ours: 6%+ primary, 7%+ secondary, 8%+ tertiary. We stress at 85% occupancy. 10-15% of purchase price in capex reserve.)

💰 Financing strategy — target leverage, fixed vs. floating preference, refinancing triggers. (We don't exceed 75% LTV. Fixed only, unless exit within 18 months. We refi when we can lock within 100bps of current floating rates.)

🏢 Management protocols — how you select property managers, what KPIs you track and how often. (Professional third-party with 20+ properties under management unless we're within 50 miles. Weekly: occupancy by unit type, revenue per sq ft, delinquency. Monthly: turnover, move-out reasons, competitive rate surveys.)

📬 Investor communication — frequency, format, what you include. (Quarterly for stabilized, monthly for development. Always includes performance vs. pro forma, market update, operational challenges, forward outlook.)

This document signals that you've moved from doing deals to operating a business. Lenders understand immediately you're not winging it.

If you have floating-rate debt or maturities coming in the next 6-12 months, what you do in the next 90 days will directly influence your credibility in future capital conversations.

Floating debt: Model the cost of fixing now vs. the upside if rates drop 100-150bps over the next year. Unless you're exiting within 12 months or have a specific reason to expect rate cuts beyond 150bps, lock in fixed rates. Yes, it'll hurt if rates drop. Lenders who see you proactively managing rate risk view you as prudent. Lenders who see you gambling on Fed cuts view you as taking unnecessary portfolio risk.

Debt maturing in 6-12 months: Start conversations with your lender today. A proactive extension conversation 6-9 months out signals professional portfolio management. A panicked request 30 days before maturity signals the opposite.

Tight equity cushions: Build liquidity before you need it for your next raise. An operator with $500K in immediately accessible reserves signals prudence. An operator with $50K signals constraint.

Highest ROI thing on this list. Takes 2-3 hours total.

Record 5-10 minutes covering: your background and how you got into real estate, your operating philosophy, your track record with specific numbers on 2-3 key projects, your market specialization, your 3-5 year vision, and what you're looking for in capital partners.

Use Loom or just your phone. Authenticity matters more than production quality.

As part of stress-testing our positioning this year, I sent this video to three lenders before introductory meetings. No deal on the table, just building the relationship. Two watched it before we met. Both conversations skipped the "tell me about yourself" stage entirely and went straight to market discussion. That's the difference between showing up as a serious operator and showing up as another cold inquiry in their inbox.

Identify your core service providers and make the relationships deliberate.

Property management: Same firm across multiple properties if possible. If you use different managers, document why — market-based, size-based, whatever the logic is. The goal is deliberate platform, not a random collection.

Construction: Same principle. Preferred GC relationships you've built signal that you've found partners who deliver and you're willing to pay for reliability instead of re-bidding every project to save 3%.

Advisory relationships: Appraisers, attorneys, insurance brokers, lenders. Consistency signals platform. We now use the same property management firm for both facilities, the same insurance broker, the same legal counsel for acquisitions, and the same regional bank for operating accounts. Lenders see that and immediately understand the difference between someone building a business and someone collecting deals.

The total investment: 8-10 hours to build, one hour per quarter to maintain, $50-100/month in tools.

The framework transformed how lenders perceive us. We went from "operators with two properties" to "professional platform with documented systems." That shift directly produced 75 basis points better terms on our most recent refinancing — $22,500 per year in savings on a $3M loan.

The documentation isn't the hard part. Deciding to do it is.

It is not death that a man should fear, but never beginning to live.

— Marcus Aurelius