Close to USD 820 billion of U.S. commercial-property loans could mature in 2024, coming due after a broad decline in property prices and sharp increase in borrowing costs that may stymie the refinancing of some mortgages. Loans maturing in 2024 total around USD 600 billion, according to MSCI Mortgage Debt Intelligence data. Additionally, USD 214 billion of loans were slated to come due in 2023 but, according to our analysis, were not subsequently refinanced and no sale of the associated collateral occurred; we have deemed these loans “likely extensions.”
Lender lookout
Of the loans coming due this year, more than half were provided by commercial mortgage-backed security (CMBS), collateralized loan obligation and investor-driven lenders (e.g., debt funds). CMBS lenders have the single largest exposure to loans maturing in 2024, accounting for nearly 30% of the outstanding balance. Later in the maturity schedule, banks dominate. Bank lenders are behind at least 45% of the loans scheduled to come due in 2025, 2026 and 2027.
Loans originated in 2021 make up the largest single vintage for 2024 loan maturities. Given these loans were originated around record-high prices and at ultra-low interest rates, we anticipate that many of these borrowers will look to their lenders in the hopes of extending the maturity of their loans. Not every lender will be willing or able to extend, however, making this vintage of loans a prime target for those investors looking for opportunities in the dislocation.
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