Multifamily Debt Faces Refinancing Risks as $250B Comes Due

Most U.S. apartment loans remain on solid footing, but a meaningful share could struggle to refinance as maturities pile up and interest rates stay high. That’s the finding of a new bulletin from Yardi Matrix, which points to growing pressure on properties financed when borrowing was cheap.

Nearly $250 billion in multifamily loans comes due through 2028, Yardi Matrix said. Market-rate properties account for about $230 billion of that total, and fully affordable properties make up the rest.

About 8% of the loans in Yardi’s database, which tracks $1.4 trillion of multifamily debt, have debt-service coverage ratios of 0.6 or less along with high loan-to-value ratios. A ratio below 1.0 means a property’s net income doesn’t cover its mortgage payments.

As a result, properties that borrowed when rates were lower may not earn enough to refinance their full loan balance at today’s rates, the bulletin said. Borrowers may need to put in more equity, negotiate extensions or find supplemental financing.

The risk is concentrated in floating-rate loans made from 2020 through 2022. More than a quarter of the $52.5 billion in variable-rate loans outstanding from that period are tied to properties with estimated coverage ratios of 0.8 or less.

The findings add to concerns about a broader commercial real estate maturity wall, with Trepp estimating $733.2 billion in loans coming due in 2027.