2026 Mid-Year Review: J&M Business Capital

J&M Business Capital
Headquarters: Canton, MA
Founded: 2019
Services: Investment Real Estate Financing & Gap Funding
States Served: MA, CT, NH, RI
www.jandmbuscap.com

What projects, initiatives, or types of work have been keeping your team busiest during the first half of 2026?
We remain primarily focused on the 1–4-unit residential market, where ground-up construction activity has increased significantly. We are seeing strong demand for new four-unit developments, both as long-term rental properties and as condominium conversion projects for sale. The rehab market also remains robust, driven by the acquisition of distressed properties that are renovated and repositioned as rental housing.

What trends or shifts have stood out most to you so far this year within your industry?
Ground-Up Small Multifamily Construction Is Gaining Momentum. Developers continue to pursue 2–4 unit projects as high home prices and limited housing inventory create demand for both rental housing and attainable ownership options. Four-unit developments are particularly attractive because they maximize density on residential lots while remaining within traditional residential financing and zoning frameworks in many markets. Rental Economics Continue to Outperform Homeownership. The gap between the cost of owning and renting remains historically wide, keeping demand strong for rental housing. Elevated mortgage rates and affordability challenges are pushing many households to rent longer, supporting occupancy and rental demand for smaller multifamily assets.

What challenges or opportunities have had the biggest impact on your business during the first half of 2026?
Valuation and Exit Risk. While demand remains healthy, appreciation has moderated considerably. Investors can no longer rely on rapid price increases to offset underwriting mistakes, making accurate valuations and realistic exit assumptions more important than in prior years. Rising insurance and operating expenses. Property insurance premiums, real estate taxes, and maintenance costs continue to increase in many regions. These expenses are placing pressure on property cash flows and reducing debt service coverage ratios. The impact on lending, as a result of these challenges, for lenders specifically: Requiring higher borrower equity contributions. Stress-testing rental and sale assumptions more aggressively. Closely monitoring construction budgets and contingency reserves. Focusing on experienced sponsors with proven execution capabilities.

As we look ahead to the second half of the year, what are you watching most closely?
Key issues to watch in 2026 will be interest rate direction and capital markets. The biggest variable remains the trajectory of interest rates. Even modest declines in borrowing costs could significantly improve acquisition economics, refinance activity, and property values. Conversely, if rates remain elevated, transaction volume may stay muted, and sellers may continue to resist price adjustments. What to watch: Treasury yields, mortgage rate trends, bank and non-bank lender appetite, refinance activity

Property values and seller expectations are showing a growing number of owners who have delayed selling may be forced to transact due to loan maturities, partnership issues, or capital needs. This could create acquisition opportunities if seller expectations begin to align with current financing realities.