US Apartment Landlords Face a $1.8 Trillion Debt Wall — Nearly $300 Billion Comes Due This Year as Refinancing Costs Soar
U.S. apartment landlords face more than $1.8 trillion in debt coming due over the next decade as borrowing costs rise. About $757 billion of those loans are maturing from 2026 through 2028, including nearly $300 billion this year and another $223 billion in 2027, according to Mortgage Bankers Association data cited by WSJ. Landlords are now refinancing loans at roughly twice the rates available five years ago, WSJ reported on Monday. Refinancing Pressure Apartment mortgage rates fell to around 3% in 2020 and 2021, helping fuel investment in multifamily properties. New construction later expanded sharply, particularly across the Sunbelt, with markets including Phoenix, Denver, Atlanta and Austin seeing large numbers of new apartments, the report added. Now, some landlords are selling properties at losses, returning buildings to lenders or restructuring their balance sheets after refinancing. Read Also: Mark Zuckerberg Adds $27 Billion to Net Worth Monday, More Than Rest of Top 10 Combined Distress Spreading Ryan Cotton, Bain Capital's head of real estate, said lenders have "gotten a lot more aggressive" as distress begins to appear. The pressure can also reach renters, as landlords
S. 8 trillion in debt coming due over the next decade as borrowing costs rise. About $757 billion of those loans are maturing from 2026 through 2028, including nearly $300 billion this year and another $223 billion in 2027, according to Mortgage Bankers Association data cited by WSJ. Landlords are now refinancing loans at roughly twice the rates available five years ago, WSJ reported on Monday.
Refinancing Pressure Apartment mortgage rates fell to around 3% in 2020 and 2021, helping fuel investment in multifamily properties. New construction later expanded sharply, particularly across the Sunbelt, with markets including Phoenix, Denver, Atlanta and Austin seeing large numbers of new apartments, the report added. Now, some landlords are selling properties at losses, returning buildings to lenders or restructuring their balance sheets after refinancing.
Read Also: Mark Zuckerberg Adds $27 Billion to Net Worth Monday, More Than Rest of Top 10 Combined Distress Spreading Ryan Cotton, Bain Capital's head of real estate, said lenders have "gotten a lot more aggressive" as distress begins to appear. The pressure can also reach renters, as landlords dealing with higher debt costs may raise rents or add fees, while cutting back on repairs and other upkeep. 5% to about 6%, and he was considering selling rather than making a large additional payment. The refinancing pressure does not necessarily mean the underlying property is weak.
Greg Corbin, president and founder of Northgate Real Estate Group, said an asset can remain viable even when its capital structure no longer works, and bankruptcy can provide a way to resolve that financing problem Blackstone Inc. (NYSE: BX ) defaulted in June on a $90 million loan tied to a Northern Dallas apartment building. 1%. 5% in the past month and remain more than 20% below their 2022 peak.
Meanwhile, distressed-property buyers are becoming more active as some owners struggle with refinancing. Cityview is buying directly from lenders that have taken control of properties and is getting roughly a 40% discount on a newly renovated Dallas-area apartment complex that was foreclosed on, the report added. Read Also: CMS Targets $1 Billion in Annual Savings With new Medicare Lab Payment Rates — Here's What Could Change in 2027 Image via Shutterstock