Gray Capital predicts that the current trend of “extend and pretend” in multifamily loan forbearance will result in a significant increase in loan maturities within the next year. In their latest report, the private equity real estate company discusses this emerging wave of maturities and how it will impact the multifamily market.
According to Spencer Gray, president and CEO of Gray Capital, lenders are starting to move away from these practices as they become less incentivized to continue them. This shift is expected to create opportunities for distressed property investments on an individual asset level rather than across the entire sector.
The new report from Gray Capital builds upon their previous research on 2023 loan maturities and examines how last year’s surge was handled by lenders. They also discuss how this has pushed back some effects of 2023’s maturity wave due to extensions, accommodations, and workouts commonly known as “extend and pretend.”
Using data from CoStar and New York Federal Reserve, Gray Capital projects another spike in loan maturities towards late 2025 or early 2026. Matt Bastnagel, communications director at Gray Capital explains that CoStar’s data shows a significant increase (25%) in October 2025 compared to October 2023 which indicates that some loans were extended leading up to this spike.
In summary:
– Multifamily loans have been subject to “extend-and-pretend” practices
– These practices are coming closer towards an end
– The resulting maturity wave may lead investors towards distressed properties at an individual asset level
– A new report by Grey capital suggests a potential spike for late Oct/early Nov.
