In this episode of the REconomy Podcast™, Chief Economist Mark Fleming and Senior Commercial Real Estate Economist Xander Snyder examine whether the commercial real estate maturity wall has reached a turning point. The conversation unpacks why both borrowers and lenders are pursuing fewer loan extensions, how investor lenders and banks differ in their approach to loan extensions, and what "resolution" really means in a CRE market where distress has diminished, but hasn't disappeared.
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“The market appears to be moving from a phase where many loans were simply being extended to a phase where more loans are reaching some sort of final outcome." — Xander Snyder, Senior Commercial Real Estate Economist at First American
Xander Snyder - Hello and welcome to episode 142 of The REconomy Podcast, where we discuss economic issues that impact real estate, housing and affordability. I'm Xander Snyder, senior commercial real estate economist at First American, and here with me today is Mark Fleming, chief economist at First American.
Hi Mark. Today we're talking about something that's been hanging over commercial real estate for the last few years: the maturity wall. Specifically, whether that maturity wall might be reaching a turning point.
Mark Fleming - Hi Xander. Yes, that's right. And, to be clear, we mean the mortgage maturity wall here, not the kind of maturity wall that parents hope their teenagers eventually climb over.
Xander Snyder - Speaking from experience.
Mark Fleming - Indeed. Observations extend to purely parental and economic observations, small sample size aside.
Xander Snyder - Yeah, sample size that small, observations are unlikely to be statistically significant. But we digress with this little statistical humor. In commercial real estate, the maturity wall refers to the large volume of commercial real estate mortgages scheduled to mature over some period of time. So, unlike a typical 30-year fixed rate residential mortgage, which is gradually paid off over those 30 years, most commercial loans reach maturity with an outstanding balance left over.
Mark Fleming - That's right. And that outstanding balance is referred to in the industry as a balloon payment.
Xander Snyder - Exactly. When that balloon payment comes due, the borrower has to do something. They can pay off the loan, refinance it, sell the property, negotiate a modification with the lender, or in some more difficult cases, face a default.
Mark Fleming - And so this question about what those borrowers are going to do has concerned many in the commercial real estate industry over the last several years, because a lot of loans that were originated when rates were really low, way back in 2021 and 2022, are now maturing in a much higher-rate environment.
Xander Snyder - Exactly. The math has been a little difficult. Interest rates are higher, many property values are now lower, and for some asset classes, especially office, operating income has been under meaningful pressure, so that makes refinancing harder. And, as a result, the market has relied more on loan extensions, sometimes referred to as amending or extending, or somewhat less charitably, extending and pretending.
Mark Fleming - I'm actually partial to that latter version, extending and pretending. A phrase that sounds like it belongs in the dictionary of real estate jargon right next to kicking the can down the road.
Xander Snyder - Yes, extending and pretending does kind of belong in the kicking the can down the road section of the dictionary. Interestingly though, the latest data suggests that that proverbial can was not kicked as much this year as it was a year ago. So, the maturity wall is still large, but it is no longer getting bigger. The Mortgage Bankers Association estimates that roughly $875 billion of commercial mortgages are scheduled to mature in 2026. That's down from about $957 billion originally scheduled for 2025. So, still a very large number, but it is the first decline since the MBA began tracking maturities across all commercial real estate lender types in 2022.
Mark Fleming - Okay, so a step in the right direction. The maturity wall is still there, and it's also no longer increasing.
Xander Snyder - Yeah, exactly.
Mark Fleming - And so how much of all of these extensions fall? I mean, we like our stats around here.
Xander Snyder - Yeah, I certainly do. And the answer is quite a bit. In 2024, approximately $384 billion of commercial mortgage debt that was scheduled to mature that year was rolled into 2025. By comparison, in 2025, that figure fell to about $200 billion that was ultimately rolled into 2026. As a share of expected maturities at the beginning of each of those years, that means extensions fell from about 41% to about 21%.
Mark Fleming - Okay, so roughly speaking, a little quick math here, the share of maturing debt being pushed into the next year was cut in half. That's impressive. To be exact, that's about 48.78% less. I know Odeta's not here, but I need to make sure to keep her significant digit accuracy intact.
Xander Snyder - Yeah. The story would change meaningfully if it were 48.79.
Mark Fleming - Well, you know, I haven't even told you about that third decimal place.
Xander Snyder - Yeah. To your point, this is right. Fewer loans are being pushed forward, both in absolute dollar terms and relative to the original amount scheduled to mature. So that suggests that the market is becoming less reliant on delay as its primary strategy for managing these loan maturities.
Mark Fleming - Yes, but fewer extensions does not necessarily mean all good news, right? Resolution can mean a refinance, but it can also mean a sale, a workout, or even a default. Not all resolutions are good.
Xander Snyder - That's right. A turning point doesn't necessarily mean everything's all clear, at least not for all parties involved. Distress is still here. It hasn't disappeared. Delinquency rates for commercial mortgage-backed securities are at levels that haven't been seen since the aftermath of the Global Financial Crisis, especially in the case of office. So rather, I think the main point to take away from this shift in the maturity wall is that the market appears to be moving from a phase where many loans were simply being extended to a phase where more loans are reaching some sort of final outcome.
Mark Fleming - Okay, so I've got an idea. Let's put it this way: less extend and pretend, and more resolve or reset.
Xander Snyder - Borrowers and lenders are increasingly having to decide how to resolve that loan. What to do with that property's long-term future. Is the property healthy enough to be refinanced through typical channels? Will the borrower need to contribute more equity? Does the lender need to modify the terms? Should the asset be sold? Is there a limited future at the current cost basis? These are all hard questions to answer, but people are being forced to find those answers now. And that really marks the market transition we're talking about.
Mark Fleming - So what sorts of trends are we seeing across the specific lender types?
Xander Snyder - Right, well, for non-banks, extensions as a percentage of scheduled maturities have been falling since 2024. This figure increased for banks in 2025, but then declined in 2026.
Mark Fleming - So both banks and non-banks rolled less debt forward from 2025 into 2026 than they did the year before.
Xander Snyder - Correct. Banks extended approximately 20% of all their commercial real estate loans in 2025 into 2026, whereas a year ago they extended roughly 45% of all their commercial real estate maturities from 2024 into 2025.
Mark Fleming - So it seems that across all lender types, the reliance on maturity extensions appears to be easing. That sounds encouraging. Are all lender types contributing equally to the extended maturity amounts?
Xander Snyder - No. And it is interesting when you dig into the specific lender categories. Another notable observation jumps out, which is investor lenders. These are entities that lend their own capital rather than other people's capital. They represent a relatively small share of the total outstanding commercial real estate mortgage universe, roughly 10 to 11% of all outstanding commercial mortgages, but they accounted for an outsized share of those extensions: about 18% in 2025, and roughly 30% into 2026.
Mark Fleming - Okay, so just for a little more context, how does that compare to regular banks?
Xander Snyder - Sure. Banks accounted for roughly 43% of extensions from 2025 into 2026, and held 37% of all outstanding principal balances. So banks are accounting for a more equitable share of extensions relative to their total holdings compared to investor lenders.
Mark Fleming - Okay, so this sort of suggests that investor lenders are providing extensions more often than other types of lenders.
Xander Snyder - I think that's right. Their share of extensions is much higher than their share of outstanding debt. And that likely reflects the types of loans that investor lenders tend to hold. Many are shorter term, transitional, sometimes floating rate, or tied to business plans that require some sort of operational implementation expected to be completed before the maturity date. If that business plan was delayed by higher rates, slower leasing, higher construction costs, or lower valuations, the extension can then become the bridge to whatever the new operating plan is.
Mark Fleming - And so those investor lenders are sort of more flexible with their borrowers than maybe banks. Of course, we should be clear that there is nothing necessarily wrong with extending and pretending. A well-structured extension can be entirely reasonable if the property has a viable path forward, but repeatedly extending without a credible plan is just kicking the can. So, maybe a more apt metaphor would be the commercial real estate version of Weekend at Bernie's.
Xander Snyder - Back to kicking the can.
Mark Fleming - Propping a loan up on a dead building and hoping nobody notices. No? Yes? Too much? A stretch?
Xander Snyder - I don't think so. There's your '80s reference, people. And honestly, that is a surprisingly accurate description of the worst possible version of extending and pretending.
Mark Fleming - Such a movie. What can I say? I am here to make mortgage delinquency metrics culturally accessible, at least for those of us from the '80s.
Xander Snyder - Well, we all appreciate the service you do to bring mortgage finance to the masses. Coming back to the actual real estate, the bigger point is that delay as a lending strategy has a shelf life. If income at a property isn't improving, if values aren't sufficiently recovering…
Mark Fleming - Xander, I got you flustered on this one. That's great.
Xander Snyder - …and if financing conditions don't support an easy path to refinance, then eventually the loan needs a real solution.
Mark Fleming - Okay, so we've talked a lot about the statistics and the details, but let's just take a step back and look at the broader picture. What changed? Why are fewer loans being extended now relative to a year ago?
Xander Snyder - Well, for starters, some loans have simply had more time to find a path forward. Borrowers that ran into operating challenges over the last several years have had time to adjust business plans, perhaps bring in additional equity, meet with lenders, or sell assets to raise cash where necessary.
The second thing that matters is that price discovery is largely complete, at least that portion directly related to the interest rate shock in 2022. Buyers and sellers are not perfectly aligned now, but there is far more agreement today than there was two years ago about what assets are worth in this higher interest rate environment.
Mark Fleming - And, of course, that really matters because a lender cannot confidently refinance against collateral if nobody can even agree what that collateral is worth in the first place.
Xander Snyder - Exactly. And a third point worth mentioning is that credit availability is gradually improving. The MBA forecasts commercial mortgage originations rising from about $635 billion in 2025 to about $805 billion in 2026, which means that more capital is now available for refinancing.
Additionally, the Federal Reserve's Senior Loan Officer Opinion Survey, it's a mouthful, the acronym is SLOOS, I love the acronym. That survey showed that commercial real estate lending standards at banks eased for the first time in the first quarter in several years. I think lenders are more interested at this point in putting their capital into more productive loans.
Mark Fleming -That's all good news. But, as we noted earlier, a falling extension rate need not be pain free. If a loan doesn't get extended and can't be refinanced, then the solution may be a sale at a lower price, a restructuring, or even a default.
Xander Snyder - That's right. The maturity wall is still there, it's significant, and some borrowers will not make it through this part of the cycle without losses. But that's also why this looks like a turning point, rather than just another year of delay.
Mark Fleming - Okay, so listeners, I know you've been waiting since the beginning of this episode for this. An obvious music reference — it only missed the '80s by one year, so close. Xander, the market is finally processing the wall instead of just adding another brick in the maturity wall, no?
Xander Snyder - Maybe the lenders don't need no education. Thank you. I apologize to all of our listeners for singing. I'll try to keep it to a minimum in the future. But the point is that near-term maturities are no longer increasing, extensions are falling, and credit conditions are improving enough that more borrowers have a path to real resolution.
Mark Fleming - Nicely done, Xander, nicely done.
Xander Snyder - So reset, as you put it Mark, doesn't mean that every outcome will be painless, but it is a healthier place for the market to be in, rather than simply pushing those maturities forward again and again. If you want more detail on commercial real estate mortgage maturities, be sure to check out my latest blog post on that topic on the First American Economics Center.
Mark Fleming - Very nice.
Xander Snyder - Thank you for joining us on this episode of The REconomy Podcast. If you have an economics-related question that you'd like us to answer in the future, you can email us at economics@firstam.com. And as always, if you can't wait for the next episode, you can subscribe to our Econ Center at firstam.com/economics or connect with either of us on LinkedIn. Until next time.
Thank you for listening, and we hope you enjoyed this episode of The REconomy Podcast from First American. We're pleased to offer you even more economic content at firstam.com/economics. This episode is copyright 2026 by First American Financial Corporation. All rights reserved.
This transcript has been edited for clarity.