CMBS loan maturity payoffs face challenges going into 2023

After a modest rise in the maturity payoff rate for 2022 from COVID-19 pandemic lows, DBRS Morningstar projects that paying off commercial mortgage-backed securities (CMBS) will become more difficult in 2023, as performance at many hotels remains below pre-pandemic levels and lenders have become increasingly wary of financing shopping malls amid declining sales and occupancy. The balance of conduit loans scheduled to mature through 2023 totals more than $57 billion, with roughly $22.5 billion in conduit CMBS loans maturing in 2022 (including about $4 billion that already matured through April with a successful 78.1 percent payoff rate), followed by nearly $35 billion teed up for 2023, more than double the $28 billion that matured during the two-year period from 2019 through 2020.

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