A massive wave of commercial real estate (CRE) debt is coming due in 2026, often called the “refinancing wall” or “maturity wall.” In 2025 alone, nearly $1.0 trillion in CRE loans matured, and by the end of 2026 well over $1.5 trillion will have reached maturity. Some estimates put 2026 maturities as high as $1.8 trillion, marking one of the largest refinancing waves in history. This surge stems from 2010s-era loans, many with five- to ten-year terms, coming due in a short span and colliding with a very different interest-rate environment.
Why is this a challenge? Many of these loans were originated during an ultra-low-rate period. Borrowers who locked in financing at 3% to 4% in the mid-2010s are now facing refinance rates that can be nearly double (or more). At the same time, property values in some markets have softened due to higher capitalization rates, constrained rent growth, and overall market uncertainty. In short, owners must contend with higher interest costs on potentially lower-valued properties—a recipe for refinancing difficulty.
It’s important to note that this “wall” is not a single, immovable deadline but a rolling challenge that will play out over several quarters. The impact will vary by region and by property sector. The multifamily sector is not immune to the refinancing crunch, even if its underlying fundamentals appear stronger than those of office or retail.
Many multifamily owners are feeling the crunch from the maturity wall. During the 2010s, when debt was cheap, investors often used short-term or interest-only loans, and those loans are now coming due. Multifamily maturities are set to surge, with a pronounced wave in 2026. After reaching approximately $104.1 billion in 2025, the loan maturity calendar jumps 56% to roughly $162.1 billion in 2026 and edges higher to $167.7 billion in 2027, creating a two-year peak that will test refinancing capacity and pricing.
Although refinancing is still occurring, it frequently requires new equity and comes with tighter terms. The core challenge is lower loan proceeds. With higher rates and more conservative underwriting, a new loan covers a smaller share of value than it did a few years ago, forcing owners to inject additional cash or secure alternative capital. Many are turning to mezzanine loans or preferred equity, with private credit providers stepping in to bridge the shortfall between senior proceeds and payoff amounts.
If owners lack fresh capital or can’t secure gap financing, options narrow to: sell, restructure, or risk default. These pressures, combined with softer renter demand and moderating rent growth, point to selective distress where highly leveraged owners from the low-rate era meet today’s higher-rate reality. The strain is not confined to offices. In Q3 2025, total distressed CRE volume reached $126.6 billion, up 18% year over year, with multifamily accounting for $22.8 billion, or 18%.
Facing this refinancing hurdle, many lenders and borrowers have tried to buy time. Through 2024–2025, the go-to move was “extend and pretend,” modifying or extending loans to push out maturities and reduce immediate defaults. In Q3 2025 alone, tens of billions of CRE loans were adjusted to delay defaults and avoid fire sales. But this only kicks the can: the debt and higher rates remain, and many extended loans are now crowding into the 2026 window.
The upshot is likely more properties moving into distress, especially among owners who waited for deeper rate cuts. While the Fed trimmed the funds rate by 25 bps in both September and October, that relief may be too little, too late for borrowers facing large payoffs. Distress-related apartment sales have risen steadily since the pandemic and accelerated over the past 18 months. Rolling 12-month Troubled volume climbed from about $1.1 billion in early 2020 to $6.7 billion in early 2024, then to a new high of $13.8 billion by June 2025. REO dispositions followed a similar path, up from $1.2 billion in January 2024 to $2.7 billion by mid-2025. Restructured activity also increased, though less markedly.
The ratio of distressed asset sales to total investment activity has also increased over the past five years, though it remains more volatile. The share rose from 0.2% in early 2020 to a 10-year high of 5.1% in early 2024, then fluctuated, ending at 1.3% in the latest quarter. This backdrop sets the stage for more motivated sellers: as more distressed or near-distressed multifamily assets come to market, pricing power tilts toward buyers.
Periods of financial strain for some can create attractive opportunities for others, and the 2026 maturity hump is no exception. For well-prepared real estate investors, especially those with readily available capital, the next 12 to 18 months could offer chances to acquire multifamily assets at discounted valuations. Industry observers note that properties unable to refinance will come to market, often with motivated sellers who are more flexible on pricing. In practical terms, this could mean buying an apartment community at a higher cap rate than was imaginable during the boom years of the 2010s.
Key ways the refinancing wall creates a buyer’s market:
Every opportunity carries risk. Multifamily may avoid the deep distress seen in offices or retail, but some offerings will have issues—deferred maintenance, optimistic prior pro formas, or stiff competition from new supply. Approach this window for opportunistic buys with both excitement and caution.
Preparation and discipline are key for the upcoming wave of multifamily opportunities. Consider the following strategies:
Many industry leaders are cautiously optimistic that CRE fundamentals will improve through 2026. If inflation stays contained and the job market holds, multifamily demand should reassert itself as a pillar of strength. In that case, today’s refinancing crunch may be a temporary dislocation rather than a lasting downturn, and investors who step in while others pull back are likely to be rewarded over the long run.
The looming 2026 CRE refinancing wall presents a paradox: it is a clear challenge for current property owners, but it is also a strategic opening for new investors. We are entering a phase similar to the aftermath of past real estate cycles, when patient, well-capitalized buyers could secure excellent deals amid uncertainty. Multifamily, supported by resilient demand, is poised to be one of the most sought-after sectors in this environment, not because it is problem-free but because its long-term fundamentals are strong. The coming quarters may bring distress for some apartment owners, and that distress can shift bargaining power to buyers who have been waiting for prices to reset.
For investors, the key is to approach these opportunities with eyes wide open. Preparation and prudence go hand in hand. Those who conduct rigorous due diligence, secure solid financing, and adhere to sound investment principles will be best positioned to benefit from what lies ahead. If risk is managed wisely, the coming year could be remembered as a time when cornerstone multifamily assets were acquired at prices and yields that generate outsized returns in the decade to come. Market cycles are a natural part of real estate, and this refinancing crunch may be the mechanism by which the market hands well-positioned investors a significant opportunity.
