Property debt’s ‘maturity wall’ eases in US as US$875 billion comes due
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[NEW YORK] A steadily building wall of maturing property debt in the US is finally letting up as the outlook for commercial real estate improves.
Commercial and multifamily real estate debt maturities are expected to decline 9 per cent this year – to US$875 billion – from US$957 billion last year, according to a report from the Mortgage Bankers Association. The group’s forecast shows a steady decline in annual maturities through 2031.
“This maturity wall is shorter than it was last year, but it’s still quite a lot of loans,” Michael Fratantoni, chief economist at the trade group, said on Monday (Feb 9) at a conference in San Diego.
The commercial property debt sector has been under intense pressure since interest rates began rising and real estate values sank. Many lenders gave borrowers more time to pay down debt rather than take losses.
Now lenders are reopening the spigot for new debt while property owners are either refinancing or agreeing to sell at a loss. Loan originations are expected to increase 27 per cent to more than US$805 billion this year, the mortgage banker group estimates.
Still, the hefty number of loans scheduled to mature this year will likely lead to additional increases in delinquencies for older-vintage loans, the group reported.
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In the hard-hit office sector, US$167 billion of outstanding mortgages should come due this year before stepping down to US$123 billion in 2027 and US$76 billion in the following year.
The commercial real estate lending environment improved in the fourth quarter of 2025, supported by higher loan volumes, increased loan sizes and other factors, according to brokerage CBRE Group.
Commercial real estate investment totalled US$499 billion last year, up 22 per cent from 2024, the brokerage reported.
“We are seeing a bifurcated but increasingly healthy commercial real estate lending market,” James Millon, CBRE’s co-head of capital markets the US and Canada, said. BLOOMBERG
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