The CMBS Maturity Wall Hides a Sharp Refinancing Reset

Over the next nine months, more than 2,600 conduit and SBLL CMBS loans will mature, with a combined balance exceeding $100 billion. The average distress rate across this pool stands at 5.55%, but this figure masks significant disparities by property type. Office loans carry the highest distress rate at 9.4% on a $23.86 billion balance, while multifamily loans, traditionally considered safer, have a 7.5% distress rate in this cohort.

When considering future refinancing, the situation becomes even more concerning. Loans maturing in this window have an average note rate of 5.44%, compared to a loan-weighted rate of 6.58% for loans originated between May and August of this year—a gap of approximately 114 basis points. This gap applies regardless of whether a loan is flagged as distressed or not.

Property types face varying degrees of reset, with mixed-use loans facing the widest at 178 basis points, followed by retail at 173 basis points and office at 172 basis points. Hotel loans show the smallest gap at 32 basis points, as they were already priced close to today's market. A significant portion of the $87.8 billion balance is concentrated in just 10 of the 371 metro areas, with New York, Newark, and Jersey City alone accounting for 18.1% of the national total.

Individual loans are large enough to significantly impact these numbers. For instance, a single Honolulu retail property has a $1.73 billion loan maturing in June 2027, while a $1.69 billion office loan in Cambridge is set to mature in May 2027. Shadow distress, which describes the potential for higher payments after refinancing, poses a real challenge even for performing loans.

Three New York office towers illustrate the disparities in outcomes, with $673 million maturing in November 2026, $544 million due in February 2027, and $430 million due in September 2026, already showing signs of strain. January 2027 is a critical month, with four distressed office loans across New York, Washington, Seattle, and San Francisco.

Despite smaller distress rates, individual loans like a $699.7 million New York office loan still contribute substantially to the total figures due to their size. Medical office properties are showing higher distress rates as general office occupancy stalls, and an NYC office REIT faces doubt on $249 million in debt.