Nearly $1 Trillion in Commercial Real Estate Loans Face Maturity Hurdles in 2025
Commercial real estate markets face another challenging year ahead as loan maturities continue to stack up. According to the Mortgage Bankers Association’s 2024 Commercial Real Estate Survey of Loan Maturity Volumes, approximately $957 billion—representing 20% of the $4.8 trillion in outstanding commercial mortgages—will mature in 2025. This marks a 3% increase from the $929 billion that matured in 2024.
Market Extensions Continue Trend
The increase follows a pattern established in previous years, as many loans originally scheduled to mature in 2024 were extended into 2025. This continuation of “extend and pretend” strategies reflects ongoing challenges in the commercial real estate financing landscape.
Despite the Federal Reserve cutting its short-term interest rate target by 100 basis points in 2024, property owners found little relief as longer-term interest rates increased by a similar amount over the same period. Many borrowers who had anticipated refinancing at lower rates were forced to seek extensions instead.
MBA’s forecast suggests longer-term rates will remain rangebound for the foreseeable future, creating a persistently challenging environment for addressing these maturing loans.
Significant Variations Across Property Types
Maturity volumes vary considerably by property sector:
- Hotel/motel loans face the highest pressure with 35% maturing in 2025
- Office property loans follow at 24%
- Industrial property loans at 22%
- Retail and healthcare properties at 18%
- Multifamily properties (excluding depository-serviced loans) at 14%
Capital Sources Face Uneven Exposure
The distribution of maturing loans also varies significantly across different capital sources:
- Credit companies, warehouse facilities, and other lenders will see 35% of their outstanding mortgage balances ($180 billion) mature in 2025
- CMBS, CLOs, and other asset-backed securities face 29% maturity ($231 billion)
- Depositories will manage 25% of their portfolios maturing ($452 billion)
- Life insurance companies have a more moderate 9% exposure ($64 billion)
- Government-sponsored entities have minimal exposure, with just 3% of multifamily and healthcare mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA, and Ginnie Mae ($31 billion) maturing in 2025
Individualized Solutions Required
It’s important to note that the $4.8 trillion in commercial mortgage debt outstanding spans diverse property types, capital sources, metropolitan areas, submarkets, vintages, and borrowers. As MBA points out, each maturing loan requires individualized attention from owners, lenders, and servicers to determine optimal paths forward.
No two deals are alike, and broad generalizations about commercial real estate markets fail to capture the nuanced reality facing individual properties and loans. While aggregate numbers highlight the magnitude of the challenge, solutions will ultimately be crafted on a case-by-case basis.
As is typical in commercial real estate finance markets, opportunities and challenges vary widely across capital sources, property types, and geographic locations. This diversity will continue to shape how the industry navigates the significant volume of maturities in the year ahead.
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