"Credit unions have been the bright spot throughout the pandemic," Chad O'Connor, senior managing director of capital markets at Marcus & Millichap, tells GlobeSt.com. While there were other active sources of capital through the pandemic, the credit unions have been the most active in providing liquidity to the market.

"They have had the smallest percentage of lenders withdraw from the market since the beginning of the pandemic, and I see them continue to be active in 2021," adds O'Connor. Next year, he expects credit unions to remain a stable provider of capital, but there is one caveat. Credit unions tend to have limited capital allocations. That was an issue this year when many credit unions hit their allocations earlier than expected. Many of them have hit their allocations for the year because there is less competition in the market, and they are attracting more business than they have historically," says O'Connor.

Other lending sources either paused or provided limited liquidity, particularly through the early months of the pandemic, and most have tightened underwriting standards. This includes higher debt-yields and a 5% reduction in loan-to-value. "Lenders are using higher vacancies and reserves to underwrite, likely leading to more conservative loan proceeds," says O'Connor. Banks have also worked closely with borrowers to avoid an onslaught of defaults, particularly in the hospitality and retail sectors. In O'Connor's home market of San Diego, he has yet to see a significant increase in strategic defaults or foreclosures.