Newmark Flags $179 Billion in Low-Rate Loans Facing Refinancing Crunch by 2028

Lenders shift away from extend-and-pretend approach as Treasury yields hold above 5%, threatening borrowers who locked in debt before 2023 rate hikes.

By the Family Office Real Estate Daily Desk·Monday, October 19, 2026·1 min read

Editorial summary of reporting byfinance.yahoo.com Our editorial standards →

The answer · checked against finance.yahoo.com

How much commercial real estate debt faces refinancing risk by 2028 and what does Newmark say about it?

Newmark research identifies $179 billion in low-rate fixed commercial real estate debt maturing through 2028 that faces refinancing risk, with roughly 78% of that securitized debt carrying rates below the current 10-year U.S. Treasury yield. Lenders are moving away from extend-and-pretend strategies, and Newmark analysts warn that waiting for lower rates is no longer a workable refinancing approach for CRE borrowers.

Key facts

Newmark found that $179 billion in low-rate commercial real estate debt maturing through 2028 is exposed to refinancing risk.
Roughly 78% of fixed-rate securitized commercial real estate debt maturing through 2028 carries an interest rate below the current yield of the 10-year U.S. Treasury bond, according to Newmark.
Newmark analysts wrote that 'lenders are moving away from the extend-and-pretend approach that has dominated the past four years.'
The overall CMBS delinquency rate climbed 17 basis points to 8.02% in September, according to Trepp.
The office sector posted the highest core-sector delinquency rate at 12.16%, according to Trepp data cited by Newmark research.
Newmark analysts wrote that 'for CRE borrowers, waiting for lower rates is no longer a workable refinancing strategy.'

Newmark Flags $179 Billion in Low-Rate Loans Facing Refinancing Crunch by 2028 — Image: editorial illustration · Story sourced from finance.yahoo.com

Roughly 78% of fixed-rate securitized commercial real estate debt maturing through 2028 carries an interest rate well below the current yield on 10-year U.S. Treasury bonds, Newmark found. The brokerage identified $179 billion in low-rate debt exposed to refinancing risk over that period.

Most of the loans were underwritten when the cost of debt was near historic lows and valuations were high. The market largely expects rates to stay elevated, and lenders are moving away from the extend-and-pretend approach that has dominated the past four years, Newmark analysts wrote.

Yields on the 10-year Treasury have soared past 5% over the last month and have stayed elevated at levels that analysts have long said would threaten the huge number of commercial real estate borrowers with loans underwritten before the Federal Reserve began raising interest rates in 2023. Bond traders are reacting to volatility in the macroeconomic space, with the war in Iran broadening to impact another key trade route for the world's oil and President Donald Trump's trade war showing little sign of cooling.

Inflation remains elevated. The consumer price index report this week came in ahead of expectations and pushed traders to briefly begin shifting bets toward another rate hike at the Fed's meeting later this month before trading back toward bets on flat rates after Kevin Warsh spoke in Bangkok on Thursday.

CMBS delinquency rates are climbing. The overall rate climbed 17 basis points to 8.02% in September, according to Trepp. Retail delinquencies fell sharply in September but increased or were flat across office, industrial, multifamily and lodging loans.

The office sector's 12.16% delinquency rate remains the highest of the core sectors. Multifamily stress is climbing as apartment operators with loans extended from before the pandemic or relying on bridge financing face impending maturity dates and rate resets at significantly higher costs.

For commercial real estate borrowers, waiting for lower rates is no longer a workable refinancing strategy, the Newmark analysts wrote.

The Deployment Angle

Family Office Real Estate Daily Desk · our analysis, not the source's

Family offices holding levered commercial real estate through co-GP structures or direct ownership should pressure-test refinancing assumptions immediately. If a loan matures between now and 2028 and carries a rate below the current 10-year Treasury yield of 5%, the equity cheque required to cover a shortfall could be substantial. A $100 million property with a $70 million loan at 3.5% refinancing at 6% faces roughly $1.75 million in additional annual debt service, compressing cash-on-cash returns by 250 basis points on the equity base before any valuation haircut.

Avoid new co-GP commitments where the sponsor's existing portfolio carries heavy 2026-2027 maturities unless the operating agreement grants you visibility into loan-level refinancing plans and exit liquidity. Multifamily operators relying on bridge financing or extended loans from before the pandemic present elevated risk. The 8.02% CMBS delinquency rate and 17-basis-point September increase suggest lenders are tightening, not extending further.

Office remains the highest-delinquency sector at 12.16%, but multifamily stress is climbing faster. If you hold apartment assets financed in 2020 or 2021, model a refinancing scenario at 6% and underwrite the equity call required to avoid a sale. A separate-account structure with a programmatic lender willing to lock in a forward rate commitment ahead of maturity may preserve more optionality than waiting for a Fed pivot that Newmark analysts now say is not a workable strategy.

Questions this story answers

01How much commercial real estate debt is at risk of a refinancing crunch by 2028?

Newmark identified $179 billion in low-rate commercial real estate debt maturing through 2028 as exposed to refinancing risk. Most of those loans were underwritten when the cost of debt was near historic lows and valuations were high, and they now face refinancing into a significantly higher rate environment.

02Are lenders still extending and pretending on distressed commercial real estate loans?

Newmark analysts wrote that lenders are moving away from the extend-and-pretend approach that has dominated the past four years. The analysts noted that the market largely expects rates to stay elevated, which makes loan extensions a less viable strategy for both borrowers and lenders.

03Why are 10-year Treasury yields a problem for commercial real estate borrowers right now?

Yields on the 10-year Treasury have soared past 5% over the last month, according to the source. Newmark found that roughly 78% of fixed-rate securitized commercial real estate debt maturing through 2028 carries an interest rate below that benchmark, meaning most maturing loans face materially higher refinancing costs.

04Is multifamily facing the same refinancing stress as office in 2026?

Newmark research highlights that multifamily stress is climbing as apartment operators with loans extended from before the pandemic or relying on bridge financing face impending maturity dates and rate resets at significantly higher costs. CMBS delinquency data from Trepp showed multifamily delinquencies increased or were flat in September.

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Original reporting

finance.yahoo.com

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