$1.5 Trillion in CRE Debt Is Coming Due: Why 2026 Could Trigger the Biggest Office Foreclosure Wave Yet

While much of the attention over the past two years has focused on fire sales of distressed towers and CMBS investors taking massive losses, a far larger threat is building just ahead: the 2026 debt maturity wall.

By the end of 2026, more than $1.5 trillion in commercial real estate loans will mature, with office properties carrying a heavy share of the burden.

For owners, lenders, and tenants alike, this maturity wall is less a brick barrier and more a slow-moving pipeline of pressure — one that will play out quarter after quarter, reshaping who owns what and which buildings survive.

For tenants, the stakes are high. Buildings that refinance successfully will remain competitive, reinvested, and stable. Those that can’t may fall into special servicing, foreclosure, or fire-sale territory. Leaseholders stuck in the wrong building at the wrong time could face service interruptions, stalled improvements, or even operational disruption.

2026 won’t just be another chapter in office distress. It could be the biggest wave of foreclosures yet. Here’s why… and how smart tenants can navigate it.

The 2026 Maturity Wall: Trillions on the Line

Start with the numbers. Between now and the end of 2026:

• $1.5 trillion in commercial real estate loans mature.

• In the CMBS market alone, maturities total $174 billion in 2025 and another $92 billion in 2026.

• Office loans are the most exposed: up to 17% of maturing office loans are expected to fail refinancing, even under relatively benign interest rate scenarios.

This isn’t a singular “wall” where everything hits at once. It’s a wave that will keep rolling across quarters, pushing building owners, lenders, and tenants through one refinancing test after another.

The problem: most of these loans were originated during the cheap money era of the 2010s. Back then, sub-4% interest rates made debt cheap and valuations balloon. Today, with rates much higher and demand softer, those loans don’t pencil anymore.

Refinancing Risk and Market Dysfunction

The biggest challenge isn’t just the size of the debt pile — it’s the fact that refinancing has become structurally dysfunctional.

• Roughly 15% of all CRE loans maturing by 2026 won’t refinance successfully, with office and retail the most exposed.

• Maturity drag is rising: more than $23 billion in CMBS loans have already passed maturity without resolution (versus zero in 2019). Loans are clogging the system, unresolved for months.

• Lenders now look past debt service coverage ratios and focus on debt yield — NOI versus loan balance. With tenants downsizing and vacancies rising, those yields are falling fast.

The result: an industry-wide game of “extend and pretend.” This dysfunction has created a “clogged pipe” in the CMBS market. Loans linger unresolved, borrowers cling to extensions, and lenders hesitate to force foreclosures. But each extension just pushes more debt into the 2026–2027 window. When that wave finally hits, there may be no more wiggle room.

Why the Worst Is Still Ahead

If 2024 and 2025 were about fire sales and early capitulations, 2026 will be about forced resolution.

Why? Because the fundamentals are still deteriorating:

• Vacancy is rising. U.S. office vacancy is projected to peak at 24% by 2026, the highest on record.

• Values are cratering. Moody’s estimates up to $250 billion in property value could be erased by weaker demand.

• Leases are rolling. As long-term leases expire, many tenants are giving back space, reducing cash flow just when landlords need it most.

• Lender patience is wearing thin. Extend-and-pretend can only last so long when maturities force a binary outcome: refinance or foreclose.

That combination means even after the first wave of distressed asset sales, the next two years could bring a larger, more systemic foreclosure cycle.

The Tenant Playbook: How to Navigate the Distress Pipeline

The maturity wall isn’t just a problem for landlords and lenders. Tenants will feel the fallout in ways big and small: deferred maintenance, stalled amenity upgrades, disrupted services, or even forced relocations if a property slips into foreclosure.

The smartest tenants will treat landlord debt as part of their portfolio strategy. Here’s how to do it.

1. Monitor Building Debt Status Like You Monitor Rent

Knowing when your landlord’s loan matures is now as critical as knowing your lease expiration date. Buildings with 2025–2026 maturities and high leverage carry elevated risk.

Ask for debt maturity schedules during due diligence. Track whether a loan is in special servicing or flagged on a watchlist. A property facing a refinancing test within 12–18 months deserves extra scrutiny: is the sponsor strong enough to inject equity? Is the lender historically aggressive or more likely to extend?

2. Use the Tenant’s Market Without Getting Trapped

Yes, landlords under pressure will offer juicy concessions: oversized TI allowances, months of free rent, shorter terms. Take advantage, but structure protections into your lease.

Examples:

• Escrow TI dollars so your build-out isn’t derailed mid-project.

• Termination or relocation rights if ownership changes or the building trades hands in foreclosure.

• Step-in rights for services if the landlord fails to fund building operations.

This way, you capture today’s concessions without inheriting tomorrow’s instability.

3. Demand Proof of Reinvestment

A landlord’s willingness (and ability) to reinvest in the building is the single best predictor of its survival. Look for hard evidence: recent capital projects, budgeted upgrades, or announced renovation plans.

Amazon’s $81 million in upgrades to its Seattle tower wasn’t cosmetic; it was a signal to lenders and tenants that the asset was future-proof. By contrast, a landlord deferring capex is effectively letting the building slide into obsolescence.

4. Model Disruption, Don’t Just Fear It

What happens if your building enters foreclosure mid-lease? Too many tenants haven’t run that scenario. Use tools to model disruption: renewal timing if ownership flips, assignment rights if leases are sold, or operating costs if maintenance budgets dry up.

Planning for disruption doesn’t mean avoiding risk — it means being ready to pivot quickly if the building falters.

5. Anchor Yourself Near Growth Tenants

Creditworthy tenants stabilize assets. Lenders are more willing to refinance them, landlords are more willing to invest in them. If you can position your lease alongside tenants like Amazon, or the wave of AI firms taking down trophy space in Manhattan and San Francisco, you’re effectively hedging against ownership distress.

In some cases, proximity is strategic. Law, finance, and healthcare tenants near applied AI firms are building ecosystem advantages while enjoying the halo effect of their stability.

Why Creditworthy Tenants Hold the Keys

The Amazon refinancing at 1918 Eighth Ave. in Seattle is the case study every tenant should pay attention to. Hudson Pacific Properties secured a $285 million refinancing in 2025 because Amazon occupied 98.7% of the building and had invested heavily in upgrades.

This is the playbook for lenders: if the tenant is strong, the building survives. If not, it sinks. That dynamic will only deepen in 2026.

For tenants, the message is clear:

• Your covenant strength gives you leverage.

• Your neighbor’s covenant strength protects your lease.

The Bottom Line for Tenants

The fire sales of the past two years were just the prologue. The real test comes in 2026, when the debt pipeline forces lenders and landlords to make hard choices on trillions in maturities.

Some towers will refinance and reinvest, buoyed by creditworthy tenants. Others will default, foreclose, and change hands at a fraction of past valuations. For tenants, this is both risk and opportunity.

The winners will be those who:

• Monitor landlord debt like a balance sheet.

• Negotiate smart protections into leases.

• Anchor near strong tenants.

• Use tools to anticipate disruption before it hits.