You're not the only one with a loan coming due. Per the MBA's latest loan maturity survey, about $875 billion of commercial and multifamily loans were scheduled to mature in 2026. That's 17% of everything outstanding.
A lot of those loans were written when rates were much lower. So the payment that worked five or seven years ago may not support the same loan amount today. That's not a crisis if you see it coming. It becomes one when you find out 30 days before the maturity date.
Start with the date, then work backward
My rule is simple. Talk to a broker no later than 90 days before your loan matures. If your occupancy dropped, a big tenant is leaving, or the property needs work, start sooner.
Ninety days sounds like a lot until you lay out what has to happen. The lender needs an appraisal. You may need an environmental report and a property condition report. Title, insurance, entity documents and underwriting all run in parallel, and any one of them can stall. Small battles win the war, and in a refinance the small battles are the reports and documents nobody ordered on time.
Pull these four things this week
Before you call anyone, get these in front of you:
- Your current note, so you know the exact maturity date, any extension options and whether there's a prepayment penalty
- A current rent roll with lease end dates
- Your trailing 12-month operating statement
- A list of anything big coming up, like a roof, HVAC or a tenant renewal
With those, a good broker can tell you in one conversation roughly where you stand.
Size the new loan before you assume anything
Here's where owners get surprised. A new lender doesn't care what your old loan amount was. They size the new loan on today's net operating income, today's rate and their own coverage requirement, usually 1.25x or higher.
Say you own a retail center that pays off at $2.6 million. At current rates, its income might only support a $2.3 million loan. That $300,000 gap is a real number you need a plan for, and it's much easier to plan for in month nine than in month one.
If the numbers do work, great. You can shop the refinance and pick the best terms. If they don't, you still have time to choose your path instead of having one chosen for you.
Your options if there's a gap
There are more ways out than most people think.
You can bring cash to close and pay the loan down to what the property supports. You can ask your current lender for an extension, usually with a paydown or a fee. You can take a bridge loan for a year or two while you raise rents or fill vacancy, then refinance into permanent debt. If your business occupies the building, an SBA loan can sometimes reach a higher amount with a smaller down payment.
Some owners sell. That's a legitimate answer too, and it's better made on your timeline than the lender's.
Don't skip the renewal offer, but don't take it blind
Your current lender may send a renewal offer a few months out. Sometimes it's the best deal available. Sometimes it's just the easiest one for them.
I tell owners to treat it like any other quote. Put it next to two or three alternatives and compare the rate, the term, the fees, the prepayment terms and the covenants. If it wins, take it. If it doesn't, you'll know.
What I'm watching
Lenders are still lending, but they're pickier on property types with soft occupancy, especially office. Multifamily and industrial with clean numbers are getting real competition between lenders. If your property is in the second group, a well-presented package can earn you better terms than you'd expect.
If your loan matures in the next 12 months, schedule a free consultation. Send me the four items above and I'll tell you where you stand and what I'd do next. No pressure, and no cost to find out.