According to a new report from Trepp, the volume of maturing CMBS loans is expected to significantly increase in the coming years. This trend, combined with recent history, has led experts to anticipate a rise in loan modifications.
Trepp reports that there are currently $131.3 billion worth of outstanding CMBS loans that are scheduled to mature by the end of 2021 and an additional $321.4 billion through 2027. Of these maturing loans, approximately 27% consist of office properties.
In 2023, there was a notable surge in CMBS loan modifications due to declining property values and higher interest rates at the time. Instead of refinancing these loans upon maturity dates, many underwent modifications such as extensions or other amendments.
The first quarter of 2024 has already seen $2.5 billion worth of newly modified CMBS loans and April saw another $1.l1 billion added to this figure according to Trepp’s data analysis team.” Additionally,” they note,” delinquency rates for CMBS continue on an upward trend.” If interest rates do not decrease before these maturing loans reach their maturity dates,” more modifications can be expected throughout the restof this year.”
The article “CMBS Loan Modifications Expected To Rise” was originally published on Connect CRE.
