Loan Extensions Reach New Highs At $384B

Lenders are continuing to extend loans, with $384 billion now set to carry over into 2025. This figure surpasses the $270 billion in loan extensions recorded for 2024, according to data from the Mortgage Bankers Association (MBA).

According to Aaron Jodka, research director for capital markets at Colliers, loan extensions now make up 40% of debt maturing this year. Colliers estimated this based on the MBA’s 2024 loan maturity report. While the analysis isn’t exact—since loans can be refinanced, renegotiated, or newly issued—it highlights the growing trend of loans not being paid off upon maturity.

Commercial Mortgage-Backed Securities (CMBS) and banks are the most likely to extend loans, Jodka noted. Of the CMBS loans maturing in 2025, 54%—equivalent to $125 billion—were initially due in previous years. Similarly, 44% of bank loans, or $199 billion, were carried over from past due dates. In contrast, life insurance and agency loans were largely paid off, reducing total maturities by $8 billion.

Multifamily, office, and alternative asset classes, such as self-storage and manufactured housing, are the top recipients of loan extensions. Office loans accounted for $85 billion in extensions, or 45% of the $187 billion in 2025 maturities. Multifamily properties had the largest extension volume at $97 billion, roughly one-third of the $310 billion in loans set to mature in 2025. Other assets saw extensions totaling $87 billion.

Among asset classes, industrial properties had the highest percentage of 2025 maturities carried over from prior years, with 55% being pushed forward. Given the sector’s strong fundamentals and high transaction volume, this trend is seen as a logical approach.

Jodka anticipates that a significant portion of 2025 maturities will be further extended into 2026 or beyond.

“Lenders are adjusting to market conditions and pricing shifts by forcing sales, initiating foreclosures, and exploring alternatives beyond loan renegotiations,” Jodka stated. “Still, $957 billion in loans will not be paid off this year, and a substantial portion will be deferred to 2026, when another $663 billion in loans come due.”

 

Source:  GlobeSt.