As we move into Q2 of 2025, the commercial real estate (CRE) lending landscape is facing one of its most consequential years in recent memory. Nearly $957 billion in loans are set to mature this year—roughly 20% of the total $4.8 trillion in outstanding commercial mortgage debt. It’s a debt wall that was widely anticipated but is now fully materializing—and it’s reshaping the way borrowers and lenders are doing business.
Despite these headwinds, the Mortgage Bankers Association (MBA) projects a 16% increase in commercial and multifamily originations this year, estimating $583 billion in new lending. That figure includes a substantial $361 billion in multifamily loans alone. So what’s driving this seemingly contradictory environment of distress and growth?
The Debt Maturity Wall Is Here
Much of this year’s maturity volume is carryover from 2024. Many borrowers extended loans last year in the hopes that interest rates would fall more aggressively. That didn’t happen. Despite the Federal Reserve cutting rates by 100 basis points in 2024, longer-term interest rates have remained sticky—making refinancing more expensive and eroding equity positions for borrowers who acquired or refinanced at the top of the market.
The concentration of maturities isn’t evenly distributed across property types:
- Hospitality leads with 35% of its total loan balance maturing in 2025.
- Office follows at 24%, amid persistent vacancy and evolving workplace demand.
- Industrial sits at 22%, reflecting rapid shifts in post-COVID logistics and supply chains.
- Multifamily, often seen as the safest bet, accounts for 14% of maturities but continues to attract the most lending activity.
Traditional Lenders Pull Back, Private Capital Steps Up
Banks and traditional depository institutions hold the largest share of maturing CRE debt—over $450 billion—and many are retrenching, constrained by tighter capital requirements and internal risk exposure. CMBS accounts for another $230 billion, while life companies and private credit firms hold the remainder.
As regulated institutions tighten underwriting or sideline certain asset classes entirely, alternative lenders and debt funds are stepping in. Mezzanine structures, preferred equity, and short-term bridge financing are increasingly common, particularly for borrowers facing negative leverage or partial recapitalization needs.
The Repricing Moment
For better or worse, 2025 is proving to be a “repricing year”—a time when values, debt structures, and investor expectations are being recalibrated. Some property owners are selling or refinancing at lower valuations. Others are negotiating with lenders to extend, modify, or restructure terms. The result is a bifurcated market: well-located, stabilized assets continue to attract financing, while transitional or underperforming properties struggle to find a home on lender balance sheets.
Outlook: More Cautious Optimism Than Crisis
While headlines have understandably focused on distress, the data suggests a more nuanced story. According to the MBA, lending activity is up, not down. That’s due in part to strong fundamentals in sectors like multifamily and industrial—but it’s also a sign that capital is available for the right deals.
There are three key takeaways for borrowers and investors right now:
- Refinancing requires a plan. Waiting for rates to drop may not be a viable strategy in 2025.
- Liquidity comes at a premium. Flexibility, speed, and access to non-bank capital are critical.
- Not all distress is bad. For opportunistic buyers and well-capitalized sponsors, this is an ideal environment to deploy capital.
If you’re navigating a loan maturity or seeking capital for a new acquisition, this is the time to reassess your lending relationships. The capital stack is changing—and lenders are adapting just as fast as borrowers. Contact us to learn how your can position yourself correctly in 2025.