KBRA Releases Research – 2023 CMBS Loan Maturities: Better by Count

NEW YORK--(BUSINESS WIRE)--KBRA releases research on the 2023 CMBS loan maturities. Nearly 94% of 2023 maturing CMBS loans paid off despite the negative headlines about the challenging commercial real estate (CRE) finance environment. The numbers appear less rosy by loan balance, with a 71.8% payoff rate, as larger loans were more likely to face refinancing challenges.

This KBRA report highlights the refinance experience of $42.2 billion of 2023 maturing CMBS conduit and single-asset single borrower (SASB) loans during a tumultuous period of higher interest rates, uncertain CRE property values, economic uncertainty, banking sector challenges, and geopolitical tensions. The loan population for this report comprises both fixed and floating rate, as well as considering fully extended maturity dates as the final maturity dates for those loans with original extension options.

2023 CMBS loan maturities by the numbers:

• $42.2 billion matured in 2023 across 2,313 loans.
• 93.6% by loan count paid off as of year-end and 71.8% by balance.
• Conduit saw a payoff rate of 94.2% by count and 81.8% by balance compared to SASB, which was 46.4% and 40.4%, respectively.
• $6.5 billion or 55% of the non-paid off loans were extended by loan balance (22% by count).
• 21.5% of the office maturities did not pay off (49.1% by balance) versus 3.8% (18.5%) and 6.1% (21.4%) for lodging and retail, respectively.
• 58.1% and 54% of retail and office loans were extended by balance, respectively (23.3% and 21% by count).

Although market dynamics will evolve over 2024 and 2025, this report also examines how maturing loan payoffs in 2023 may provide some insight into the $117.5 billion coming due in the next two years. Based on the patterns observed for 2023, CMBS could see a meaningful increase in the proportion of loans that fail to refinance by their maturity date over the next two years. That said, the breadth and rapidity of interest rate increases are likely in the rearview mirror, which should provide a more stable refinance environment, particularly if rates decline and the economy is resilient.

Click here to view the report.

Related Publications

• KBRA CMBS Loss Compendium Update: December 2023
• 5- and 10-Year Deal Credit Metrics

• CMBS Trend Watch: December 2023
• CMBS Loan Performance Trends: December 2023

• 2024 CMBS Sector Outlook: Cloudy, With a Glimmer of Hope

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.