Murky Macroeconomic Outlook Clouds the Picture for More Than $75 Billion of CMBS Maturities Through 2024

Sticky inflation and higher interest rates suggest that paying off the roughly $75 billion of loans throughout the commercial mortgage-backed securities (CMBS) universe maturing through 2024 could become even more challenging. We consider two cases in our analysis of upcoming maturities. In our base-case scenario, where interest rates and underwriting thresholds remain stable, we project a 2023 maturity payoff rate rising to just above 65%, up from 58.4% as of November 2022, mainly because of already-defaulted loans that we exclude from our analysis, and dropping to the mid-50% range in 2024 (see Exhibit 1). Under a more negative forecast, where interest rates continue to rise and lenders further tighten their underwriting criteria, the CMBS payoff rate could drop to less than 50% in 2023 and to 35% in 2024.