Nearly A Trillion Dollars of Commercial Property Loans Coming Due In 2024

According to Mortgage Bankers Association, it is 929 billion but close enough to the Big T…there were loan extensions from last year that increased this. According to Bisnow Feb. 13, 2024, “Prices on commercial properties have fallen 21% from an early 2022 peak. Office prices have dropped most precipitously, sinking 35%.”  This will make refinancing challenging in the current financial market where lenders are shying away from office buildings, and if a commercial property value has decreased lenders almost always require equity in a refinance, which often means the property owner has to put cash in the deal just to keep a loan on the property. If they are forced to sell because it doesn’t make sense to pour more money into a losing asset, this makes it challenging to find buyers who can get their own loans, and those who pay cash usually do so with a huge purchase discount.” If we do start to see some refinances happen at maturity, that would be a really nice, positive sign to see,” Trepp Research Director Stephen Buschbom said. “But at this point, I don’t think anybody’s baseline scenario would be that they’re expecting to see more refinances for office buildings than they did last year.”