US Commercial Real Estate Faces Record Amount of Maturing Debt in 2024

In 2024, the commercial and multifamily real estate market in the United States is expected to face a significant challenge as nearly 20% of outstanding debt, amounting to US$929 billion (RM4.43 trillion), matures and requires refinancing or property sales. This represents a substantial increase from the earlier estimate of US$659 billion by the Mortgage Bankers Association (MBA), primarily due to loan extensions and delays rather than new transactions.

The Federal Reserve’s decision to halt interest rate hikes may provide some relief, as experts predict that more deals will be concluded this year. Jamie Woodwell, the head of commercial real estate research at the bankers group, believes that increased clarity on interest rates, property values, and other areas of concern will help break the logjam in the markets.

However, the mounting debt poses a risk to regulators and investors, as the values of commercial properties continue to decline. This has resulted in increasing defaults and write-downs for lenders and holders of commercial mortgage-backed securities. At the end of 2023, approximately US$85.8 billion of debt on commercial properties was considered distressed, with an additional potential distress of US$234.6 billion, according to MSCI Real Assets.

The downward trend in commercial property prices is evident, with a 21% decline from the peak reached in early 2022. Office prices, in particular, have experienced the greatest decline, falling 35%, according to data from Green Street.

Financial institutions have a significant stake in the upcoming debt maturities, with US$441 billion of commercial-property debt coming due this year. Of this, US$234 billion is securitized in various forms, such as CMBS and asset-backed securities, while US$168 billion is owed to non-bank lenders.

The office sector is anticipated to face the brunt of the maturing debt, with approximately 25% of office loans coming due in 2024. The rise of remote and hybrid work arrangements has negatively impacted office property values and increased vacancies.

As the US commercial real estate market navigates this record amount of maturing debt, stakeholders will closely monitor refinancing and property sales activities to gauge the sector’s resilience and potential for recovery.




商業不動産価格の下落トレンドは明らかであり、2022年初めに達したピークから21%の低下が見られます。特にオフィスの価格は35%下落しました(Green Streetのデータによる)。