Office Owners to Face Equity Hurdles by 2027

Majority of maturing commercial office loans will require additional equity for refinancing by 2027.

Updated on Oct. 29, 2026 in Commercial

Office Owners to Face Equity Hurdles by 2027

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Is now a risky time to invest in commercial real estate given current loan refinancing challenges?

By 2027, the vast majority of maturing commercial office loans will require borrowers to inject additional equity to secure refinancing. This trend poses a significant challenge for commercial property owners as they confront loans reaching their hard maturity dates.

Why it matters

Borrowers face a substantial funding gap because current prevailing interest rates do not align with the terms established in their original loan agreements. To address these maturity walls, owners must either provide fresh capital, sell their properties, or negotiate loan modifications.

In 2027, $22.2 billion of office-sector private-label commercial mortgage-backed securities will reach hard maturity. As of September 2026, the overall CMBS delinquency rate rose 17 basis points to 8.02%.

The details

Borrowers managing properties with loans reaching hard maturity must navigate the repayment process, which is complicated by the lack of remaining contractual extension options. The recent rise in delinquency rates, driven by five large single-asset, single-borrower loans, underscores the broader stress currently facing the commercial real estate sector.

The CMBS delinquency rate reached 8.02% in September 2026.
Private-label CMBS loans reach hard maturity in 2027.

Culture Shift

The current market environment challenges the standard operational model of the Commercial Mortgage-Backed Securities lending framework. This trend reflects a broader shift away from debt-heavy property financing as refinancing becomes increasingly difficult for commercial owners.

These financing pressures could impact local real estate availability as owners struggle to maintain property upkeep or occupancy. Shoppers and business tenants may see changes in office space quality or lease availability as properties are sold or modified.

The takeaway

Commercial property owners should proactively review their loan extension options well before their hard maturity dates. Developing a contingency plan early may help avoid the need for last-minute capital injections or forced property sales.