C
ommercial real‑estate (CRE) markets are under strain as a surge of debt reaches maturity, delinquency rates climb, and office vacancies hit record highs. Most of the $2.05 trillion in debt due over the next three years was issued during the pandemic’s low‑rate period. In 2025 alone, $957 billion of CRE mortgages will mature, followed by $539 billion in 2026 and $550 billion in 2027—well above the 20‑year average of $350 billion per year. This concentration coincides with falling property values, creating a “wall” of maturities that poses both risks and opportunities for investors.
Chris Cervisi, senior vice president at Buchanan Street Partners, warns that borrowers face heightened pressure from rising rates, lower asset valuations, and tighter bank balance sheets. Securitized CRE loans are underperforming compared with other bank, thrifts, life‑insurer, and Fannie Mae products, according to Dean Kaplan, CEO of Kaplan Group. Fitch Ratings reports that the U.S. CMBS delinquency rate rose to 3.19 % in October from 3.10 % in September, driven by new office defaults and a large mixed‑use loan. Special servicing volumes for the U.S. CMBS universe climbed to 6.2 % ($37.2 billion) in October, up from 5.9 % the month before, with office loan servicing hitting 15.8 % versus 15.1 %.
Regulators are intensifying scrutiny of banks with significant CRE exposure, warning that prolonged “extend‑and‑pretend” strategies could misallocate credit and increase fragility. Fitch’s “U.S. Commercial Real Estate CMBS Loan Performance Monitor: 2H25” predicts that delinquency trends and office sector corrections will continue into 2026 amid a slowing economy, tariff uncertainty, and a cooling labor market. Nonetheless, Fitch expects 2026 refinancing activity to match 2025’s resilience, with ample liquidity offsetting the higher maturities, though sector‑specific risks remain.
Trepp’s CRE Fall 2025 Quarterly Data Review notes that CMBS issuance stayed strong thanks to bond‑investor demand. In Q3 2025, $32.31 billion of domestic, private‑label CMBS were issued (excluding CLOs), bringing the year‑to‑date total to $92.48 billion. Trepp projects that the full year could exceed $123 billion—its heaviest issuance since 2007, when $230.5 billion were issued. KBRA’s November 2025 CMBS Trendwatch echoes this, forecasting the strongest private‑label issuance year since 2007 as the calendar ends.
