Year to date, about $5.65 billion in commercial real estate loans have been modified with an extension, according to Trepp. Although the term increase varies from loan to loan, the largest share of these extensions was 37%, for terms increases of 1-12 months.
More than 20% of modified CRE loans have gone for extensions of 37 months or more, Trepp reported. When focusing on loans that were modified due to reaching maturity dates specifically, a little more than half were extended by 1-12 months.
The second quarter saw the year’s largest number in loan extensions upon maturity at $957 million dollars worth; Jack LaForge from Trepp cited higher interest rates and concern about macroeconomic health as drivers behind this trend toward modifications: “No one wants to refinance from a 4% loan into a 7% loan; investors do not want pay 7% finance an acquisition; even if they did it is debatable if markets would finance purchase” he wrote .
