CMBS Dominates First Wave of Commercial Property Debt

U.S. commercial-property loans set to mature in 2023 and 2024 total nearly $900 billion. Against a backdrop of higher borrowing costs, falling prices and an increasingly risk-averse attitude among traditional sources of financing, these mortgages are coming due in a tougher capital-markets environment, and some could face challenges refinancing.

According to our analysis, commercial mortgage-backed security (CMBS), collateralized loan obligation (CLO) and investor-driven lenders are behind more than half of the approximately $400 billion in loans coming due in 2023. CMBS lenders are the largest single source, accounting for more than one-third of the outstanding balance. Bank loans maturing this year (provided by international, national and regional/local banks) will account for a smaller share of loans coming due than CMBS alone.

Banks lead in 2026 and 2027

The composition of new originations over the last decade sheds light on the wave of maturing CMBS loans. In 2013 and 2014, this group provided more loans than any other lender group, at over one-quarter of all originations. By 2016, other groups — largely banks —had expanded their lending allocations to commercial real estate and the market share of CMBS lenders was nearly cut in half.

In later years of the maturity schedule, the shift in origination patterns becomes apparent as the share of maturing loans is dominated by banks. Bank lenders are behind more than 50% of the loans scheduled to come due in 2026 and 2027.