TRD Insights: Multifamily loan maturities will jump to $128B by 2025

The wall of maturities would be up from $73B expected by end of this year, according to data CBRE analyzed

TRD New York /
May.May 19, 2020 08:00 AM
(Credit: iStock)

(Credit: iStock)

A recent analysis found an estimated $73 billion in multifamily loans will mature this year, up nearly 12 percent from 2019.

But that total pales in comparison to the expected multifamily loan maturities over the next five years, according to the data from CBRE’s analysis of Trepp and Mortgage Bankers Association.

In 2021, maturities will reach $83 million, and they will keep rising, peaking in 2025, when $128 billion in multifamily loans will mature.

Loan maturities drive investment and financing activity because they often push borrowers to sell assets, seek new financing or refinance their original loans to avoid default.

Maturities during economic crises like the coronavirus can heighten the risk for multifamily borrowers and lenders, however. These events often send multifamily operating incomes tumbling, which may make it harder for borrowers to obtain loan modifications or refinancings and may increase their default risk.

Lenders also typically raise underwriting standards during financial crises, only issuing loans secured by assets with solid net operating incomes and loan-to-value ratios.

A silver lining is that the biggest multifamily lenders are fairly well-capitalized, and may be able to absorb substantial losses related to defaults on loans.

Banks and government sponsored entities such as Fannie Mae and Freddie Mac originated the bulk of multifamily loans maturing over the next decade. Banks’ “loss-absorbing capacity” reached historically high-levels at the end of 2019. That allowed them to continue lending despite the coronavirus pandemic-related shocks the market is now experiencing, according to a report last week the Federal Reserve published on the stability of the U.S. financial system.


Related Articles

arrow_forward_ios
From left: Mapleton Rentals at at 1555-1575 61st Street in Mapleton, 1440 Story Avenue in Soundview, Beard-Van Brunt at 411 Van Brunt Street in Red Hook

Abraham Leser targets $74M Israeli bond refi for Brooklyn, Bronx properties

Abraham Leser targets $74M Israeli bond refi for Brooklyn, Bronx properties
The process for challenging property assessments is so antiquated, officials won’t do Zoom meetings. (iStock)

“A recipe for disaster”: Fighting property taxes in a pandemic

“A recipe for disaster”: Fighting property taxes in a pandemic
Clockwise from left: Bronx housing court at 1118 Grand Concourse, Governor Andrew Cuomo, Judge Lawrence Marks, New York Supreme Court at 60 Centre Street (Getty; Google Maps; Wikipedia; New York State Courts)

Attorneys find ways to “eject” tenants without Housing Court

Attorneys find ways to “eject” tenants without Housing Court
Cadillac Fairview CEO John Sullivan and the RCB Centre in Toronto (Google)

This Canadian office giant has a strategy for a return to work

This Canadian office giant has a strategy for a return to work
Bars, restaurants and live entertainment venues around the world are now weighing their reopening options. Some owners say they can’t cover the cost of operating at reduced capacity. (Getty)

Facing the music: Entertainment venues, restaurants weigh reopening options

Facing the music: Entertainment venues, restaurants weigh reopening options
Anbang’s Andrew Miller, Mirae’s Peter Lee and (from left) JW Marriott Essex House, the Westin St. Francis in San Francisco and the Four Seasons in Jackson Hole (Credit: Marriott, Westin, Four Seasons)

Buyer’s remorse?: How Anbang’s $5.8B hotel deal went sideways

Buyer’s remorse?: How Anbang’s $5.8B hotel deal went sideways
Softbank's Marcelo Claure, Masayoshi Son and Rajeev Misra (Getty; iStock)

Internal feud at SoftBank casts doubt on Vision Fund

Internal feud at SoftBank casts doubt on Vision Fund
Commercial real estate property sales fell to their lowest level in a decade as a result of the economic slowdown caused by the coronavirus pandemic. (Pixabay)

TRD Insights: Commercial deal volume plummeted 71% in April

TRD Insights: Commercial deal volume plummeted 71% in April
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...