The volume of maturing CMBS loans is “quite significant,” Trepp says in a new report. Given this volume as well as recent history, the firm expects to see an increase in loan modifications. 

About $131.3 billion in outstanding, non-defeased CMBS loans that are current on payments are scheduled to mature by the end of this year, according to Trepp. That tally rises to $321.4 billion through 2027, with about 27% consisting of maturing office loans. 

2023 saw a dramatic rise in CMBS loan modifications, due largely to lower property values and a higher interest rate environment. “Instead of refinancing old loans into new ones as loans came up on their maturity dates, often loans would undergo modifications, which mainly include extensions and any other amendments to loan terms,” Trepp reports. 

Already in 2024, the first quarter saw $2.5 billion in newly modified loans, and April saw another $1.1 billion in CMBS loan modifications. “CMBS delinquency rates are also continuing to climb, and unless interest rates are able to come down some by the time these loans hit their maturity dates, more modifications could be expected to pop up in these figures as 2024 continues,” according to Trepp. 

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