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With higher interest rates, lower values, and a surge in apartment supply, the multifamily market will be tested in the years ahead as loans come due on a large number of properties, according to a new report from Yardi Matrix.

A review of Yardi Matrix’s database reveals over 58,000 multifamily properties with loans set to mature over the next five years. This represents $525 billion of the total $1.1 trillion of loans backed by apartments. In addition, just through the end of 2025, loans on 6,800 properties totaling nearly $150 billion are slated to expire.

Yardi Matrix noted that the loan maturities are not spread evenly around the nation. The metros with the highest volume of maturities include Atlanta, $34.9 billion; Dallas, $26.6 billion; Denver, $22.9 billion; Houston, $20.8 billion; New York, $19.9 billion; and Chicago, $18.8 billion. Those that have the highest percentage loans come due through 2029 include Atlanta, 65.9%; Denver, 56.9%; Nashville, Tennessee, 56.2%; Las Vegas, 55.9%; Houston, 53.6%; and Chicago, 53.2%.

Loans originated by Fannie Mae and Freddie Mac have the largest volume of maturities—$641.8 billion; however, most of this debt comes due in five years or longer, according to Yardi Matrix. In addition, $187.3 billion came from commercial banks, $115.7 billion from the federal government/Department of Housing and Urban Development, $69.9 billion from debt funds, $67.6 billion from life companies, and $25.2 billion from commercial mortgage-backed securities (CMBS). Yardi Matrix noted that nearly half of debt fund loans will mature through the end of 2025 as well as nearly one-quarter of loans originated by commercial banks and CMBS.

“Multifamily originations peaked during years with record transaction volume, including 2021 (when $194.7 billion of loans were originated and 2022 ($208.8 billion), as investor demand reached a high point during a time of strong fundamental performance and low interest rates,” noted Yardi Matrix analysts.

Of the loans in Yardi Matrix’s database, $61.8 billion are slated to mature this year, $84.3 billion in 2025, $89.3 billion in 2026, $77.9 billion in 2027, and $107.3 billion in 2028. In addition, 85% of the loans in the database carry fixed rates and 15% have variable rates. Approximately 88% of the loans are backed by fully market-rate properties.

Fifteen metros have at least $3 billion of multifamily loans coming due between now and the end of 2025. Atlanta leads the list at $11.9 billion, followed by Dallas, $8 billion; Denver, $7.2 billion; Houston, $5.7 billion; and Chicago, $5.5 billion. Between now and the end of 2027, 21 metros have at least $5 billion of loans coming due.

“One of the main worries in the multifamily sector is the influx of supply in some markets that is leading to rents flattening or declining,” noted the analysts.

They said those markets with a high percentage of loans maturing over the short term and flattening or declining rents include Atlanta; Houston; Raleigh-Durham, North Carolina; Orlando, Florida; and Austin, Texas.