Chart of the Week
Every Friday, MBA's Chart of the Week provides commentary and analysis on a topic of interest for the industry. This comes from variety of data sources, including proprietary data from MBA's own surveys and studies, as well as from government agencies and other reliable sources of mortgage, housing, and economic data.
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Current Chart of the Week
Twenty percent ($957 billion) of $4.8 trillion of outstanding commercial mortgages held by lenders and investors will mature in 2025, a 3 percent increase from the $929 billion that matured in 2024, according to the Mortgage Bankers Association’s 2024 Commercial Real Estate Survey of Loan Maturity Volumes. Many loans that were set to mature in 2024 were extended into 2025, similar to what had happened in 2022 and 2023, as highlighted in MBA’s Chart of the Week.
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 the Fed’s rate cuts were disappointed. As a result, many loans that might have matured in 2024 have been extended into 2025, with the aggregate results showing a 3 percent increase in total commercial mortgages maturing in 2025 compared to what MBA had estimated would mature last year. MBA’s forecast is for longer-term rates to remain rangebound for the foreseeable future, and the path to work through these maturities will remain challenging. As is always the case in CREF markets, opportunities vary widely across capital sources, property types, and geographic markets.
MBA’s latest report on commercial mortgage maturity volumes showed that maturities vary significantly by investor and property type groups. Among loans backed by industrial properties, 22 percent will come due in 2025, as will 24 percent of office property loans and 35 percent 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 percent of those backed by retail and healthcare properties.
$452 billion (25 percent) of the outstanding balance of mortgages serviced by depositories, $231 billion (29 percent) in CMBS, CLOs or other ABS and $180 billion (35 percent) of the mortgages held by credit companies, in warehouse or by other lenders will mature in 2025. Just $31 billion (3 percent) 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 percent) of their outstanding mortgage balances mature in 2025.
Commercial mortgage debt outstanding totaling $4.8 trillion is spread over a wide range of property types, capital sources, metro areas, submarkets, vintages, borrowers, and more. And, as designed, as a loan matures, owners -- sometimes with lenders and servicers -- will work through that deal’s particulars to determine how best to move it forward. No two deals are the same and, particularly now, broad brushstrokes about the CRE markets don’t apply.
- Reggie Booker ([email protected]); Mike Fratantoni ([email protected])