CMBS Borrowers Face Refinancing Challenges

Article originally posted on HERE on June 21, 2021

Nearly $130 billion in CMBS debt reaches maturity before the end of 2022.

“We’re going to see some loans come up for maturity that won’t pay off,” says Melissa Che, a senior director in the U.S. CMBS group at Fitch Ratings. According to Fitch, approximately $7.5 billion of performing loans within the Fitch-rated U.S. CMBS 2.0 conduit and Freddie Mac universe are scheduled to mature through the remainder of 2021.

Data from Trepp that spans the broader CMBS market shows a significantly bigger volume of maturities. As of May, there was an estimated $71.4 billion in maturities for all of 2021 (some of which has already been refinanced) and another $58.5 billion teed up for 2022. Although it sounds daunting, the load of maturities ahead over the next 18 months is not as dire as the wall of maturities that weighed on the market in 2015, 2016 and 2017. At the start of 2015, there was an estimated $300 billion in CMBS loans set to mature by the end of 2017 with new issuance that was still weak in the aftermath of the Great Recession.