According to the Mortgage Bankers Association (MBA), approximately 20% ($957 billion) of $4.8 trillion of outstanding commercial mortgages held by lenders and investors will mature in 2025, a 3% increase from the $929 billion that matured in 2024. The MBA reports these findings in its 2024 Commercial Real Estate Survey of Loan Maturity Volumes.
“While the Federal Reserve cut its short-term interest rate target by 100 basis points in 2024, longer-term interest rates increased over the same time by an equivalent amount. Commercial property owners who had sought to take advantage of a drop in rates stemming from Fed cuts were disappointed,” said Mike Fratantoni, MBA’s SVP and Chief Economist. “As a result, many loans that might have matured in 2024 have been extended into 2025, with the aggregate results showing a 3% increase in total commercial mortgages maturing in 2025 compared to what MBA had estimated would mature last year.”
The loan maturities vary significantly by investor and property type groups. Among loans backed by industrial properties, 22% will come due in 2025, as will 24% of office property loans and 35% of hotel/motel loans. Fourteen percent of mortgages backed by multifamily properties (not including those serviced by depositories) will mature in 2025, as will 18% of those backed by retail and healthcare properties.
“Longer-term rates are likely to remain rangebound for the foreseeable future, and the path to work through these maturities will remain challenging,” added Fratantoni. “However, as is always the case in CREF markets, opportunities vary widely across capital sources, property types, and geographic markets.”
According to the MBA’s findings, $452 billion (25%) of the outstanding balance of mortgages serviced by depositories, $231 billion (29%) in CMBS, CLOs or other ABS and $180 billion (35%) of the mortgages held by credit companies, in warehouse or by other lenders will mature in 2025. Just $31 billion (3%) of the outstanding balance of multifamily and health care mortgages held or guaranteed by Fannie Mae, Freddie Mac, FHA and Ginnie Mae will mature in 2025. Life insurance companies will see $64 billion (9%) of their outstanding mortgage balances mature in 2025.
The MBA reports that the dollar figures reported are the unpaid principal balances as of December 31, 2024. Because most loans pay down principal, the balances at the time of maturity will generally be lower than those reported here.
Click here for more on the MBA’s 2024 Commercial Real Estate Survey of Loan Maturity Volumes.
