Despite Improved Performance Post-Pandemic, CMBS Loan Maturity Payoffs Face Challenges Going Into 2023

After a modest rise in the maturity payoff rate for 2022 from Coronavirus Disease (COVID-19) pandemic lows, DBRS Morningstar projects that paying off commercial mortgage-backed securities will become more difficult in 2023. While we expect the payoff rate for 2022 to show improved demand for maturing loans compared with the previous two years, in 2023 it may not be possible to refinance many hotel, retail, and office loans that are experiencing net cash flow stresses that could diminish potential refinancing options.