CRE Loan Maturations Higher Than Prior Estimates
Terrydale Capital
Feb 16, 2024 3 Min read
2023 posed a speed bump for many investors as high interest rates put a pause on commercial real estate transactions and led to many already maturing loans to push for extensions. Prior estimates for loan maturations sat around $659 billion. However, the Mortgage Bankers Association (MBA) have adjusted their prior estimate as extended loans begin to mature in 2024 with a new estimate of $929 billion. Many loans set to mature in 2023 are now set to mature in 2024, 2026 and 2028 with the addition of many extensions not being guaranteed.
How This Can Affect CRE In 2024
The additional estimate of $270 billion will also have an effect on the amount of potential distress entering the market in 2024. As uncertainty continues to surround interest rates and property valuations remain up in the air, there is a potential for a lower amount of financing transactions throughout the year. On the other hand however, the amount of loans set to mature also has the capability of relieving blockage in the market.
Maturities Broken Down By Lender Type
Between lender types, 25% - which amounts to $234 billion - is held by Collateralized Loan Obligations (CLO’s), Commercial Mortgage Backed Securities (CMBS) or other Asset-Backed Securities (ABS’s). 47% - amounting to $442 billion - is held by depository institutions. 18% - amounting to $168 billion - is held by credit companies, wholesale or other lending institutions. Finally, only 3% - amounting to $28 billion - is held by government-backed loans such as Fannie Mae, Freddie Mac and FHA.
Maturities Broken Down By Asset Type
When discussing maturity by property type, maturities percentage are as follows:
- Hotel: 38%
- Industrial: 27%
- Office: 25%
- Healthcare: 18%
- Retail: 17%
- Multifamily: 12%
In Conclusion
As loan maturations are estimated to rise in 2024, outlooks upon their effect on the commercial real estate market are looked upon with a cautious optimism, which has become the name of the game in 2024. If you are facing a rapidly approaching maturation of your commercial real estate loan, it pays to be prepared. When you need a team beside you to help you navigate your upcoming loan maturation, contact us as Terrydale Capital today.
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Headquartered in Dallas, Texas, Terrydale Capital is a leader in commercial real estate financing. We have close relationships with the nation’s top banks, lenders & family offices allowing us to provide the most competitive financing solutions in the market.
