Surging loan maturities, rising delinquency rates, and record office vacancies are challenging the commercial real estate (CRE) market, putting pressure on lenders and property owners.
A significant wave of CRE debt, mostly originated during the pandemic's low-interest-rate era, is approaching maturity. This year alone, $957 billion in CRE mortgages will have matured by yearend, warns Chris Cervisi, senior vice president at Buchanan Street Partners. This will be followed by $539 billion in 2026 and $550 billion in 2027, totaling $2.05 trillion, he wrote in the report.
This year alone, $957 billion in CRE mortgages will have matured by yearend.
This is far higher than the 20-year average of $350 billion per year, creating an unprecedented concentration of maturities just as property values have declined, Cervisi says. For debt investors, this looming wall presents considerable challenges and unique opportunities.
Cervisi warns that the recent increase in loan maturities presents significant challenges for borrowers, given rising interest rates, reduced asset valuations, and more constrained bank balance sheets.
CMBS loan assets' greater issues
Securitized commercial real estate loans are performing worse than other types of loans made by banks and thrifts, life insurers and Fannie Mae, said Dean Kaplan, CEO of commercial collection agency Kaplan Group, in a report titled "Is Commercial Real Estate at a Breaking Point in 2025?"
According to Fitch Ratings, the overall U.S. CMBS delinquency rate increased by nine basis points to 3.19% in October, up from 3.10% in September. The increase was driven by a higher volume of new office delinquencies and the addition of a large mixed-use loan to the index.
Special servicing volume for the Fitch-rated U.S. CMBS universe as of the October remittance was 6.2% ($37.2 billion) compared to 5.9% ($36 billion) in September. The special servicing rate for office loans increased to 15.8% in October from 15.1% in September.
Imploring banks to tackle insurers
As CRE delinquencies continue to increase, regulators have ramped up oversight and pressure on banks to address exposures, Cervisi says. This includes heightened scrutiny for banks with CRE concentrations, warnings about refinance risks, and concerns that prolonged "extend and pretend" could lead to credit misallocation or broader fragility.
The rising delinquency trend and ongoing correction in the office sector will persist into 2026 amid a slowing economy, uncertainty around tariff and policy impacts, and a cooling labor market, states a report from Fitch titled "U.S. Commercial Real Estate CMBS Loan Performance Monitor: 2H25".
However, in the face of these headwinds, Fitch expects 2026 CRE refinancing to remain in line with 2025's resilient refinancing, with ample liquidity absorbing elevated maturities. It does warn that sector-specific risks persist.
According to investment firm Trepp's CRE Fall 2025 Quarterly Data Review, CMBS issuance has remained robust partly because of healthy demand from bond investors.
Trepp says $32.31 billion domestic, private-label CMBS was issued in Q3 2025, excluding CLOs, pushing volume for the year through September to $92.48 billion.
"At the rate issuance has been going, the year could see more than $123 billion of deals," it says. "That would be the heaviest annual issuance since 2007, when $230.5 billion of CMBS was issued."
KBRA agrees, stating in its November 2025 CMBS Trendwatch that, as year-end approaches, CMBS private-label issuance is on track to have its strongest year since 2007.
