Refinancing is available to many apartment owners facing loan maturities, but the added capital may come at a steep cost to existing investors. A lender’s willingness to make a new loan answers only whether a deal can be financed; it doesn’t show whether the terms leave enough value for current equity holders. The key decision is whether a new loan gives a property enough time to recover—or deepens the loss of equity while owners wait for rent growth.
A sizable refinance gap
CRED iQ’s analysis of multifamily loans in Fannie Mae, Freddie Mac and commercial mortgage-backed securities deals found that 23% of loans maturing from October 2026 through December 2028 can’t be refinanced without additional equity. Those loans represent 31% of the $136 billion balance, with an estimated $6.8 billion needed to close the gap. The figures describe a defined set of loans and a projected need for more capital; they don’t establish that every affected property will face the same shortfall or have the same options.
That estimate may seem modest against the volume of concern around apartment loan maturities. But the share of affected debt is only part of the story: owners must also decide whether the capital required to refinance can earn an adequate return for current equity holders. The total gap gives a sense of the funding problem across the analyzed loans, while the decision at each property depends on its own debt, operating performance and expected rent path. Those details matter because a loan can close successfully even when the economics for existing investors have deteriorated.
Capital remains available, though borrowing terms have become more demanding. Earlier this year, Maximiliane Leachman, vice chair of CBRE’s debt and structured finance group, said some lenders that once sought 1% to 3% of a loan balance for an extension may now ask for 10%. That change can make an extension a much larger capital call, narrowing the room owners have to preserve their existing investment while meeting lender requirements. It also shows why “available capital” is too broad a description to settle whether a refinance is workable for a particular ownership group.
Leachman also pointed to borrowers returning to debt funds for another modification. That raises a practical question: how much time does another change to the loan actually buy, and what does it cost to secure? “We’re all waiting for the shoe to drop at the end of this year as those borrowers come back for the second time to that debt fund for another modification,” she said. “It will be interesting to see how many of those go back.” A second modification may extend the timetable, but it leaves the underlying property performance to do the harder work.
What a refinance may cost equity
For Michael Lynd, CEO of Kairoi Residential, securing a loan doesn’t settle the question. The refinance cost can weigh on existing equity, particularly if rent growth fails to arrive soon enough to improve the property’s position. In that case, new capital may solve an immediate maturity problem while leaving investors with less value and little evidence that the asset is on a stronger footing.
“The question that I have when I look at a lot of these refinances is the cost of that refinance is not great for your existing equity,” Lynd said. “If rent growth doesn’t show up in that first six to nine months or a year, then you have a chance of further impairing the equity value that isn't in place.” The timing he describes matters because a refinancing decision rests partly on what owners expect the property to earn after the loan closes. If that improvement is delayed, the cost of waiting can fall on equity.
Owners may choose to hold a property and raise fresh capital rather than sell at a loss. Lynd said some groups may also be reluctant to record a negative trade. That reluctance can shape the decision, but it doesn’t improve the property’s cash flow or reduce the new capital needed. Holding on could give rents time to recover; it could also leave investors exposed if operating performance doesn’t improve. The difference depends on the asset, the financing terms and the amount of time the owners can afford to wait.
For owners, this is more significant than it looks: closing a loan can be mistaken for resolving a problem when it may only move the pressure to another part of the investment. “You can get a loan, but should you take that loan? Is that the best risk-adjusted decision for your equity?” Lynd asked. That distinction is the heart of the debate.
Underwrite the decision, not the headline
Refinancing can be the right move for some properties, and the available data may support it. But an aggregate estimate of the maturity gap can’t answer whether a particular deal should take on more debt or new equity. That decision rests on the cost of capital, the property’s prospects and the effect on current investors. A marketwide figure can frame the scale of the challenge; it can’t replace a property-level assessment of the likely return from putting in more money.
Multifamily research offers plenty of figures to support competing views of the market. The useful test is whether the numbers hold up against the economics of the individual asset. If you're working in this space, the relevant questions are concrete: what will the refinance cost, how much new equity is required, and what improvement in operations would justify that capital? (And this is the part most people overlook.) A maturity extension has value only if the time it buys can help the property’s finances catch up with its obligations.
What the next stretch will reveal
For owners confronting maturities, the next stretch of rent performance will help show whether fresh capital buys a viable recovery or simply extends the pressure on equity. The figures cited here point to a financing challenge, but they don’t settle how individual owners will respond or whether rents will improve quickly enough to change a deal’s prospects. That uncertainty leaves owners weighing a known financing cost against an operating recovery that has yet to arrive. The test is whether the property can support the decision after the new loan closes.
