(Source: Mortgage Bankers Association)
Commercial mortgages tend to be longer term, with maturities spread over several years.
The lack of transaction and other activity last year, combined with built-in extension options and lender and servicer flexibility, has resulted in many commercial mortgages that were scheduled to mature in 2023 being extended or modified so that they will now mature in 2024, 2026, 2028 or in future years. As a result, the amount of commercial mortgages maturing this year has increased from $659 billion at the end of 2022 to $929 billion at the end of 2023.
The MBA’s latest report on commercial mortgage maturities shows that maturities vary widely by investor and property type. Only $28 billion (3%) of the outstanding balance of multifamily and health care mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA, and Ginnie Mae matures in 2024. Life insurance companies have $59 billion (8%) of their outstanding mortgage balance maturing in 2024. In contrast, $441 billion (25%) of outstanding mortgages held by depository institutions, $234 billion (31%) of CMBS, CLOs, or other ABS, and $168 billion (36%) of mortgages held by credit companies, warehouses, or other lenders mature in 2024.
By property type, 12% of multifamily mortgages mature in 2024, as do 17% of retail mortgages and 18% of healthcare mortgages. Of office loans, 25% mature in 2024, as do 27% of industrial loans and 38% of hotel/motel loans.
There is $4.7 trillion in total outstanding commercial mortgage debt, spanning a wide variety of property types, financing sources, metro areas, submarkets, age groups, and borrowers. And by design, as loans mature, owners (sometimes with lenders and servicers) review the details of the transaction to determine the best way forward. No two transactions are the same, and broad strokes about the CRE market don't apply, especially now.
–Jamie Woodwell (jwoodwell@mba.org)