The Better the Deal You Locked In, the Bigger the Check You’re About to Write
Apartment loans written in 2021 and 2022 are hitting maturity, and 46% of them can’t refinance without new equity.
Across $136 billion of maturing agency and CMBS multifamily debt, the median shortfall is about $25,000 per unit, and one quarter-point Fed hike in September added another $800 million to the total.
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Office is worse, with about 75% of maturing Class A office CMBS loans needing fresh equity and a gap that would take 30x more NOI growth than the sector has actually delivered.
Lenders are running out of ways to delay it.
$78 billion of CMBS loans reach hard maturity by the end of 2027, with $61.1 billion of that landing in 2027 alone.
Here’s where the equity gaps are widest, and where the first real discounts are trading:
🏢 31% of Apartment Debt Needs Fresh Equity
📉 75% of Class A Office Loans Can’t Refinance
🚪 Foreclosure Inventory Hits a 2019 High
🔨 Boston Tower Sells for $260M, Not $806M
⏳ $733B of CRE Debt Comes Due in 2027
🏠 Home Prices Fall for the First Time in 3 Years
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Multifamily Refinances Now Require a Check
About 31% of the balance on $136B of maturing agency and CMBS apartment loans can’t refinance without $6.8B in fresh equity, with 2021-22 vintages hit hardest and San Francisco, Atlanta, and Denver showing the widest gaps.
75% of Class A Office CMBS Loans Need Fresh Equity
Trepp finds the NOI growth needed to close the gap is roughly 30x what office has delivered, and $61.1B of CMBS reaches hard maturity in 2027, leaving lenders little room to keep extending.
Foreclosure Inventory Hits Its Highest Level Since 2019
ICE reports active foreclosures up 37% year over year as completed sales rise 15%, with loans originated in 2022 or later now making up a large share of the pipeline despite a seasonally normal 3.66% delinquency rate.
Distress Is Finally Trading in Boston Office
Rockpoint bought back 100 Summer St. at a foreclosure auction for $260M after paying $806M in 2019, as Q3 office sales rose 23.7% and foreign and opportunistic buyers move in on discounted assets.
$733B of CRE Debt Comes Due in 2027
CNBC reports that lenders are abandoning extend-and-pretend and refinancing costs are surging, creating a buying opportunity for investors, though many sellers still haven’t accepted lower prices.
U.S. Home-Sale Prices Fall for the First Time in 3 Years
Redfin shows the median sale price down 0.1% year over year, pending sales at a record low, and the typical monthly payment at $2,786 on a 7.32% mortgage rate, leaving buyers with more negotiating power than they’ve had in over a decade.
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