$525B In Multifamily Debt Set To Mature In The Next 5 Years

Loans on more than 58,000 properties totaling $525B will mature by the end of 2029, a new report from Yardi Matrix found.

Those properties account for nearly half of the total $1.1T in existing loans backed by apartments. Looking closer to the present, loans on 6,800 properties totaling nearly $150B are set to mature through the end of 2025, Yardi Matrix found, citing loans in its database.

Concerns about the impact of these maturities are related to the current conditions for refinancing. These properties’ loans will mature in a market where interest rates are high, property values have dropped and a surge in new units coming online is bringing down rent growth in many markets across the country.

Certain parts of the country are more affected than others, the report found. Atlanta has by far the largest balance coming due with $34.9B, followed by Dallas with $26.6B, then Denver, Houston, New York City and Chicago.

Of the loans in Yardi’s database, $61.8B are set to mature in 2024 and $107.3B will mature in 2028, the year with the greatest volume of loan maturities.

The origins of these loans and the timing of their expirations also vary. Nearly half of debt-fund loans mature through the end of 2025, and almost a quarter of commercial bank and CMBS loans will expire in the same period, according to Yardi.

Loans originated by Fannie Mae and Freddie Mac have the largest volume of maturities but a longer horizon. Most of the government-sponsored enterprise debt comes due in five or more years, Yardi found.

The delinquency rate for multifamily Fannie and Freddie loans has risen to about 0.4% from 0.1% right before interest rates began to rise in 2022. The CMBS multifamily delinquency rate was at 1.8% in February, almost double the 1% it was in January 2022, Yardi said.

Ratings agency Fitch predicted earlier this year that multifamily delinquencies for CMBS loans could reach $1.3B, a level of loss that would surpass those from the depths of the pandemic.

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