Charleston Partner Tim Zwerner, vice chair of Burr & Forman’s Real Estate practice group, was recently quoted in CoStar News on the approaching “maturity wall” of commercial real estate debt. With more than $1 trillion in loans set to come due by 2027, borrowers face the challenge of refinancing loans originally secured at interest rates near 4% as current averages hover closer to 6.5%. While this has slowed transactions in recent years, the Federal Reserve’s recent rate cut, and the prospect of more to come, has improved sentiment across the market.

“The Fed's initial cut, and the prospect of more, meaningfully improves the refinancing outlook for the $1+ trillion in maturities through 2026, but it won't be a silver bullet,” Tim told CoStar News. “Best-in-class assets will find refinancing windows open sooner; marginal assets may still face rescue.” His comments reflect the divide between strong properties that can quickly secure new financing and weaker ones that may continue to struggle despite lower rates.

The article notes that lenders have so far been flexible by extending and restructuring loans, with fundamentals improving for sectors such as multifamily, industrial, and retail. Office properties remain the biggest concern due to high vacancies and repayment issues, but overall analysts see a gradual adjustment ahead rather than a sudden wave of distress.