In recent days, the finance/banking headlines centered around the Silicon Valley Bank and Signature Bank collapses, and their impact on markets. But a quieter, more assiduous problem will have its own impact on commercial real estate lending and borrowing. This problem involves upcoming debt maturities.
Just how bad is it? How bad will it likely be? Experts told Connect CRE that the level of maturities coming due in 2023 is problematic enough. Adding to the issue is the wave of maturing loans in 2024 – and beyond. If interest rates remain high, the industry could face challenges when it comes to capital.
Where We Are Now
The number commonly tossed around concerning CRE debt maturities is $447 billion at least, according to data from Trepp. However, “this total is actually just the tip of a major wave of maturing loans between now and 2027,” said Brian Good, iBorrow CEO. He said that $486 billion in loans is anticipated to mature in 2024. Beyond that, more than $500 billion in loans are scheduled to come due in 2025, 2026 and 2027. And these are just estimates, Good explained. The numbers don’t include the debt originated by private lenders.
