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As the significant increase in interest rates over the past two years has placed pressure on multifamily owners, many properties are at refinance risk. Driven by artificial intelligence (AI), Keyway analyzed the elevated refinance risk of select Sun Belt markets—including Atlanta; Austin, Texas; Dallas-Fort Worth; Nashville, Tennessee; and Raleigh/Durham, North Carolina—to find that Atlanta faces the highest risk.

Over the next two years, more than $1 trillion in debt maturities will pressure commercial real estate owners, particularly in the small multifamily properties sector, Keyway notes. Due to a significant share of Atlanta properties that may not get refinanced, Keyway predicts it to become an attractive target for acquisitions.

The analysis, which included properties with at least 50 units and an active loan or mortgage, found that 23.7% of Atlanta’s 540,000 multifamily units and 26.7% of outstanding debt are in properties with loans coming due from now until December 2025. Atlanta is followed by Austin, with 17% of its 330,000 units in properties with loans due in the next 18 months. In Nashville, 14.7% of its 150,000 units and 15.8% of outstanding debt are in properties with loans due near term.

According to the report, Dallas-Fort Worth has the healthiest market with 13.9% of its units and 13% of outstanding debt being in properties with loans due by December 2025. Keyway notes, due to the size of Dallas-Fort Worth and its 840,000 units, the market poses a risk in an economic downturn. Across Raleigh/Durham’s 165,000 units, 13.2% of units and 13.8% of outstanding debt are in properties with loans due in the next 18 months.

Keyway detected approximately 300 commercial property owners across these markets that collectively control 126,000 units prone to debt maturity challenges. While Keyway does not disclose the identity of owners, the report notes that 11.7% of units owned by one owner in Atlanta is facing elevated risk.

“A significant portion of properties in Atlanta likely face extra elevated refinance risk in the coming years, and we expect the opportunities to buy from motivated sellers to be extensive,” the report reads. Additionally, property owners who originated loans during the COVID pandemic that are due by December 2025 may face challenges to refinance their debt. Owners of one or two properties may also face higher refinance risk than larger property owners of more than two communities.