Commercial real estate loan maturities jump to $929 billion

Nearly 20% of outstanding debt comes from U.S. commercial and multifamily real estate — $929 billion — is due this year and will require refinancing or selling properties.

The volume of loans due was up 40% from an earlier estimate of $659 billion by the Mortgage Bankers Association, a surge attributed to loan extensions and other delays rather than new deals.

As the Federal Reserve sends a signal Interest rate hike has been completedJamie Woodwell, head of commercial real estate research at The Bankers Group, said more deals are likely to be completed this year.

“Volatility and uncertainty about interest rates, a lack of clarity on property values ​​and issues with some property fundamentals have inhibited sales and financing transactions,” Woodwell said in a statement on Monday. “This year’s expiration date, plus These and other areas should begin to break the deadlock in the market.”

About $4.7 trillion in debt from various sources is backed by U.S. commercial real estate, raising concerns among regulators and investors as construction values ​​slide.Rising defaults and write-downs hit lenders New York Community Bankcommercial mortgage real estate investments by KKR & Co. believe and holders of commercial mortgage-backed securities.

An estimated $85.8 billion in commercial real estate debt was considered distressed by the end of 2023, according to the MSCI Real Assets Report, which noted that there was an additional $234.6 billion in potential distressed debt.

Green Street data in January showed commercial real estate prices were down 21% from their peak in early 2022 before the Federal Reserve sharply raised interest rates to combat inflation. According to Green Street data, office prices have fallen the most, down 35%. Real Estate Analysis Company.

Mortgage Bankers Group reported that the bank has $441 billion in commercial real estate debt coming due this year. About $234 billion of that maturing debt is securitized in the form of CMBS, collateralized loan obligations and asset-backed securities, while $168 billion of non-bank loans will mature. Lenders, such as debt funds.

About 25% of office loans will mature in 2024, MBA said. As remote and hybrid work grows, values ​​plummet and vacancies surge.

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