CMBS SASB Maturing Loans 2024 to 2025

More than $62 billion of U.S. single-asset/single-borrower (SASB) commercial mortgage-backed securities (CMBS) loans will reach their final maturity date (after exhausting all extensions) in 2024–25. In this commentary, we provide an update of the maturing SASB loans of concern, review the current SASB market and look ahead to 2025.

Key highlights:
-- The 2023 SASB payoff rate was 63% and we expect that rate will decline further in 2024 and believe that trend will continue through 2025.
-- The bulk of the 2024–25 maturities are in the Office and Hotel sectors. The Office sector maturity balance will more than double in 2025.

“It is important to note that even for properties with good cash flow and loans with favorable metrics, some borrowers will still try to work with servicers for a modification if rates stay high, which is looking more likely given the recent inflation figures,” said Rachel Sill, Senior Vice President, North American Real Estate Ratings. ”Indeed, the picture could be somewhat fluid as loans maturing in 2025 do have time for interest rates to go down and/or property cash flow to improve.”