Nearly $820 billion of U.S. commercial real estate loans could mature in 2024. The sharp decline in real estate prices and the sharp rise in borrowing costs could prevent some mortgages from refinancing. According to data from MSCI Mortgage Debt Intelligence, the total amount of loans maturing in 2024 is approximately $600 billion. In addition, $214 billion of loans were scheduled to mature in 2023, but our analysis showed that there were no subsequent refinancings or related collateral sales, so we considered these loans “likely to extend.”
Lender monitoring
More than half of the loans maturing this year were provided by commercial mortgage-backed securities (CMBS), collateralized loan obligations, and investor-led lenders (such as debt funds). CMBS lenders have the largest exposure to loans maturing in 2024, accounting for about 30% of the outstanding balance. For loans with later maturities, banks dominate. Bank lenders are backing down at least 45% of loans maturing in 2025, 2026, and 2027.
The loans originated in 2021 are the largest single vintage of loans maturing in 2024. Because these loans were originated at record high prices and ultra-low interest rates, many borrowers are expected to turn to lenders in hopes of extending their loan maturities. However, not all lenders are willing or able to provide extensions, making this vintage of loans a prime target for investors looking for opportunities amid the turmoil.
