Two numbers inside one private lender’s business say a lot about where commercial real estate stands heading into late 2026. Foreclosure bailout loans still make up 80% to 90% of new deals at Gelt Financial, and the firm’s purchases of distressed loans from other lenders have climbed steadily over the past nine months.
- Jack Miller, who founded the national lender in 1989, says the two trends are tied to the same source. “It’s a direct correlation to the economy,” he said.
Distress Is Holding Steady, Not Easing
Roughly two years ago, foreclosure bailouts were about 5% of Gelt’s business. By spring 2026, they had become the majority of its deal flow. Six months later, Miller says that share has not come down.
“It’s pretty much the same,” he said. “We’re seeing more and more properties and situations in distress.”
In earlier conversations, Miller pointed to a familiar mix of pressures behind that distress: property values coming down, properties taking longer to sell, higher operating costs, and owners who took on debt expecting rates to keep falling and values to keep rising. None of those pressures has resolved, which is why bailout demand has stayed flat at a high level rather than tapering off.
For owners, the practical takeaway is that this is not a short blip to wait out. The conditions that pushed borrowers into default in the spring are still in place in the fall.
Why Lenders Are Selling Their Problem Loans
The second signal is less visible to the public. Along with making loans, Gelt buys non-performing and distressed loans from banks and other lenders who would rather not handle them.
“Everyone likes to service the easy ones,” Miller said. “But when there’s a problem, sometimes other lenders want to shy away. We buy those, and that’s been booming the past nine months.”
Servicing a loan in default is a different job from servicing a performing one. It involves collections, workouts, and sometimes foreclosure, and many lenders are not set up for that work. When more loans go bad, more of those lenders decide it is cheaper to sell the loan than to manage it.
That makes distressed loan sales a useful read on the market. When bailout requests from borrowers and loan sales from lenders rise together, it suggests stress is showing up on both sides of the same transactions. For a borrower, it also means a loan in trouble may end up with a new holder, often a firm that specializes in default situations.
Not Every Trend Comes From the Economy
Not everything in a lender’s pipeline points in the same direction. Gelt’s condo and HOA association lending jumped after the 2021 Surfside collapse in Florida, from one or two deals a year to one or two a month. Miller says that pace has now leveled off.
He is clear that this business follows a different driver. “The HOA and condo lending has nothing to do with the economy,” he said. “It has to do with Surfside and the disaster there and the fact that associations have been kicking the can down the road for decades.”
That distinction matters for anyone reading market signals. Association borrowing reflects new safety and reserve requirements that boards must meet regardless of the economy. Foreclosure bailouts and distressed loan sales reflect financial strain. Lumping them together can lead to the wrong conclusion about how widespread the stress really is.
What Owners and Investors Should Take Away
Despite the elevated distress, Miller cautions against getting stuck waiting for the perfect moment to act. He points to his parents, who bought their home around 1965 for about $8,000. Decades later, it was worth roughly half a million dollars.
“It didn’t matter if he paid $8,000, $7,000, or $9,000,” Miller said. “You’re never going to hit the nail on the head perfect. You go for it, and then you make adjustments along the way.”
He also sees opportunity in periods like this one. “There will be disruption,” he said. “And during that disruption, there’ll be a tremendous opportunity, a buying opportunity.”
For owners under pressure, the message is to address problems early rather than hope conditions improve. For buyers and investors, the same distress that is forcing sales can create entry points. Gelt’s record of closed deals shows the range of property types and situations moving through the private lending market right now.
About Gelt Financial
Gelt Financial LLC is a national private lender and distressed debt buyer with over 37 years of experience across commercial and investment real estate. Operating in 37 states, the company provides bridge financing, foreclosure bailout loans, and non-performing loan acquisitions for real estate investors, operators, and institutions.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
Media Contact Information
Heather Hook
KeyCrew Media
Disclosure: Individuals or companies mentioned may have a commercial relationship with KeyCrew.
