The commercial real estate (CRE) industry is bracing for what many are calling the “2026 debt maturity crunch.” Billions of dollars in loans are set to come due, leaving borrowers across the country particularly in office, retail, and hospitality – facing tough decisions around refinancing, recapitalization, and portfolio strategy.
Interest rates are still higher than the last refinancing cycle, property values have dropped in many sectors, and lenders are more cautious. For owners, investors, and tenants, this creates a crunch that will test their ability to adapt.
This article breaks down the situation and outlines practical strategies to help CRE stakeholders navigate the upcoming wave of maturities.
The Debt Maturity Landscape
Between 2024 and 2026, more than $1.5 trillion in commercial real estate loans are set to mature, according to industry estimates. Much of this debt originated during a low-interest-rate environment, 10-year loans from 2015-2017 and shorter-term financing in the past 3-5 years that now faces refinancing at significantly higher costs. As PBMares notes, this looming “maturity wall” will test the adaptability of owners, investors, and lenders navigating today’s market conditions
The problem? The financial world looks very different now.
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Higher Interest Rates: The statement that many borrowers now face refinancing rates double or even triple – what they secured years ago, with a 3.5% loan in 2016 potentially refinancing at 7%, is reinforced by Investopedia’s article ‘Refinance Rates Edge Closer to the 7% Mark.
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Value Resets: Appraisals are coming in lower for certain property types, especially office buildings in markets facing high vacancies. Lower values mean reduced borrowing capacity.
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Stricter Lending Standards: Banks and life companies are scrutinizing leverage, tenant quality, and location more heavily than before.
All of this converges in 2026, when a large block of loans will require action. Owners who wait until the last minute may find themselves with limited options.
Key Challenges for Owners
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Equity Gaps – A loan that once could refinance 75% of a property’s value may now be limited to just 55–60%, creating a capital gap that the owner must plug with cash or alternate financing.
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Tenant Uncertainty – Properties with short remaining leases or high rollover exposure face questions about future cash flow, making refinancing harder.
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Distress Pressures – Some owners may be forced into selling or restructuring if they cannot meet new equity requirements.
Strategies for Navigating the Crunch
1. Start Early
The single biggest mistake owners make is waiting too long. By starting discussions with lenders and advisors 18–24 months before maturity, you gain time to explore refinancing, equity partners, or even partial dispositions.
2. Recast Debt Before 2026
Where possible, consider refinancing early even if it comes with a prepayment penalty. Spreading out maturities instead of letting them stack in 2026 can reduce exposure to a “bottleneck” year.
3. Bring in Equity Partners
Institutional investors and private equity groups are sitting on capital, looking for well-located assets at adjusted valuations. Partnering can help fill equity gaps while keeping long-term upside.
4. Explore Alternative Lenders
Banks may be pulling back, but debt funds, private lenders, and CMBS are still lending – just with different terms. Looking at these options can sometimes keep a deal alive.
5. Reassess Property Strategy
For assets facing leasing headwinds such as large office buildings, it may be time to consider repositioning or repurposing. Medical office, industrial, and mixed-use redevelopments are strong candidates for adaptive reuse.
6. Consider Sale-Leasebacks
Owner-occupiers with equity tied up in their buildings can free capital and secure long-term occupancy through a sale-leaseback transaction. This strategy is particularly attractive in medical real estate, where tenants value control and investors value stability.
7. Maintain Open Lender Relationships
Transparency is crucial. Lenders prefer proactive borrowers who acknowledge challenges and present a plan. In some cases, lenders will extend or modify terms rather than risk foreclosure.
Opportunities Amid the Crunch
Periods of dislocation also bring opportunity. For investors with dry powder, 2026 could unlock a wave of discounted acquisitions. Properties unable to refinance will come to market, often with motivated sellers.
For savvy owner-operators, it’s a chance to upgrade portfolios by acquiring distressed assets, recapitalizing at favorable terms, or converting outdated properties into higher-performing uses. Medical offices continue to show resilience, driven by demographics and the need for accessible healthcare facilities.
Positioning for 2026
The coming debt maturity crunch doesn’t have to be a crisis. With preparation, creativity, and the right advisors, owners and investors can turn challenges into opportunities.
At ICRE Investment Team, we understand the stakes. Our approach goes beyond transactions, we guide clients through refinancing strategies, repositioning options, and long-term planning so they’re not caught off guard when the clock runs out. Whether it’s navigating debt maturities, structuring sale-leasebacks, or identifying equity partners, we’re committed to helping clients thrive in an evolving CRE landscape.
