At a glance
- Newmark data showed debt maturing in the third quarter of 2026 carried an average rate of 4.04%, against 5.69% on new loans made at an average 5.5% cap rate.
- When SOFR rose from 3.62% to 3.85% in September, 178 loans with $4 billion of balance fell below a 1.25x debt service test, adding $846 million to the equity gap, CRED iQ said.
- For a lender sizing a 2027 or 2028 take-out, the equity check is now set by the coverage test, which makes the index path as important as the rent roll.
About 81% of securitized multifamily debt maturing before 2029 carries an interest rate below 5%, Newmark said, and has not yet re-priced as benchmark rates climb.
Newmark data showed debt maturing in the third quarter of 2026 carried an average rate of 4.04%, against 5.69% on new loans made at an average 5.5% cap rate. The 165-basis-point gap lifts interest costs about 41% on the same balance, as Private Wealth Daily previously reported. Fannie Mae and Freddie Mac have let apartment borrowers pay thinner premiums over benchmark rates than borrowers in other sectors, Newmark said. With that premium already compressed, borrowers have limited protection against further index increases.
Maturing loans re-price 165 basis points higher
Average interest rate on multifamily loans maturing in Q3 2026 versus new loans made at a 5.5% cap rate
Q3 2026 maturities
4.04%
New loans
5.69%
About 41% more interest cost on the same balance.
The 1.25x test
When SOFR rose from 3.62% to 3.85% in September, 178 loans with $4 billion of balance fell below a 1.25x debt service test, adding $846 million to the equity gap, CRED iQ said. Each further 25 basis points adds roughly $1 billion, the firm said, and two more hikes would leave 39% of maturing multifamily debt short of a refinance.
For a lender sizing a 2027 or 2028 take-out, the equity check is now set by the coverage test, which makes the index path as important as the rent roll.
The $6.8 billion figure comes from CRED iQ's review of every agency and CMBS multifamily loan maturing between October 2026 and December 2028. It found 23% of those loans, representing 31% of the balance, required fresh equity to refinance, with a median shortfall of 15% of the loan, or about $25,000 per apartment. Loans originated in 2021 and 2022 at a median coupon of 3.35% face refinancing rates two to three percentage points higher. CRED iQ said 46% of those loans and 57% of their balances need new equity.
We expect that share to remain elevated as borrowers refinance and adjust to the higher interest rate environment.Newmark
Newmark found about 39% of multifamily properties sold traded below their previous inflation-adjusted purchase price, up 6% from late 2021. Connect CRE reported that the maturity wall has not produced the wave of distress that was forecast; the pressure is landing on prices instead. "We expect that share to remain elevated as borrowers refinance and adjust to the higher interest rate environment," Newmark said.
CBRE research cited by Connect CRE puts the 10-year Treasury near or above 5% since early September, the highest level since 2007, with the pressure greatest on multifamily and industrial asset pricing.
Reported by the Real estate debt desk from Connect CRE, Newmark and CRED iQ. Published . Corrections