The commercial real estate debt maturity story has been building for several years now, and for a while it was easy to treat it as an abstraction: a large national number, always a year or two out, always framed as a risk that had not quite materialized yet. For multifamily owners specifically, that framing is no longer accurate. The second half of 2026 is when a meaningful share of the loans written during the low-rate years of 2021 and 2022 actually come due, and the refinancing environment those loans are maturing into looks nothing like the one they were underwritten in.
Research firm MSCI has flagged that a significant share of apartment loans from that 2021-2022 vintage mature specifically in the back half of this year, and has pointed to a likely increase in foreclosure activity as a result. That is not a prediction about the market in general. It is a specific, dated event tied to loans that were originated at interest rates that, in many cases, no longer exist as an option for refinancing.
The Gap That Is Driving the Problem
Loans originated in 2021 and 2022 were, in many cases, underwritten at interest rates two to three percentage points below where comparable multifamily debt prices today. That gap is the entire story. A property that comfortably covered debt service at a 3.5% interest rate does not necessarily cover debt service at 6%, even if rents and occupancy have held up reasonably well over the intervening years. The properties most exposed are the ones where rent growth since acquisition has not kept pace with that increase in financing cost, and where the original loan was sized aggressively against a lower-rate assumption.
National estimates put the multifamily maturity volume for 2026 meaningfully higher than 2025, with the wave continuing into 2027. That is a multi-year event, not a single quarter’s problem, and it means owners with loans maturing later in this window still have time to plan, but that window is closing steadily as the market moves through the properties that mature first.
What Your Options Actually Look Like
For owners with a loan maturing in the next twelve months, the range of outcomes is wide, and it depends heavily on where the property sits today. Properties with strong occupancy, documented rent growth, and a manageable gap between old and new debt service have real refinancing options, potentially with additional equity contributed to bridge the gap. Properties with weaker fundamentals or a larger financing gap are more likely to be looking at a recapitalization, a sale, or in some cases a negotiated transition to the lender, and starting that conversation early is the difference between an owner-driven outcome and a lender-driven one.
Lenders are, broadly, more willing to work constructively with owners who come to the table early with a clear plan than with owners who wait until the maturity date is imminent. That is not a guarantee of a favorable outcome, but it consistently produces more options than waiting does.
What to Do If Your Loan Matures in the Next 12 to 18 Months
The practical first step is an honest, current valuation of the property and a realistic assessment of what it can support at today’s interest rates, not the rate the original loan was written at. From there, owners should be having conversations with their existing lender, potential refinancing sources, and, where appropriate, equity partners well ahead of the maturity date. Waiting for the lender to initiate that conversation is generally the worst version of this process for the borrower.
How Friedman Can Help
Friedman Real Estate manages and advises on multifamily assets across Metro Detroit and the broader Midwest, and we work directly with owners who are navigating exactly this kind of maturity decision, as well as with lenders and receivers when a property has moved past the point of a straightforward refinancing. If you own a multifamily property with a loan maturing in the next 12 to 18 months and want an honest read on your options, we are happy to have that conversation.
