Hey Friends,
For the past two years, the phrase “maturity wall” has been a warning. In 2026, it’s a reality.
Hundreds of billions in commercial real estate loans originated during the low-rate environment of 2020 and 2021 are now coming due. For California multifamily investors, this is one of the most important financing conversations happening right now.
What the Maturity Wall Actually Means
When CRE loans were originated at 3% and 4% interest rates, the math worked easily. Values were rising, rates were low, and refinancing felt like a formality.
That environment no longer exists.
Loans coming due today are being refinanced into a market with:
- Interest rates significantly higher than the original note
- Tighter DSCR requirements from lenders
- More conservative appraisals
- Reduced proceeds relative to original loan balances
For some owners, the refinance they assumed would be routine is turning into a difficult conversation.
The Gap Problem
The core challenge is a gap between what borrowers expected and what lenders will approve today.
Many owners are discovering that the new loan won’t cover the old balance. That means bringing cash to closing, restructuring the deal, or in some cases, being forced into a sale they weren’t planning for.
In California, where loan balances tend to be larger and values have softened in some submarkets, this gap can be significant.
What This Means for California Investors
If you have a loan maturing in the next 12 to 24 months, now is the time to start the conversation, not when you receive the maturity notice.
The investors who are managing this well are:
- Stress-testing their refi scenarios at current rates and conservative valuations
- Engaging lenders early to understand what proceeds they can expect
- Exploring bridge, agency, and portfolio options before they’re out of time
- Building reserves in case the refinance requires additional equity
Waiting until 60 or 90 days before maturity significantly limits your options.
The Takeaway
The maturity wall isn’t a market problem. It’s an individual deal problem, and the outcome depends almost entirely on how early and how prepared you are.
California investors who understand their loan timeline and start planning now will have far more flexibility than those who don’t.
If you have a loan maturing soon and want to understand your refinancing options in today’s market, reply to this email and I’m happy to walk through the numbers with you.
Krystle