A wave of U.S. commercial real estate (CRE) loan maturities—totaling $660 billion in 2026—now looms over the capital markets, sharpening the focus on distress and lender exposure. According to MSCI Real Assets and Trepp, distress indicators are rising unevenly, especially in the office and retail segments. This divergence in risk is set to shape refinancing, lending standards, and capital allocation well into 2026, as stakeholders weigh both national and sector-specific vulnerabilities.

The $660B in CRE debt maturing in 2026 marks a critical test for national lending and underwriting discipline. Per Trepp’s datasets, banks account for roughly 40% of these coming maturities, while life companies and CMBS lenders also face substantial exposures. The scale of this maturity wall reflects years of aggressive origination during lower-rate environments. As one loan officer noted, “We’re scrutinizing every asset class, not just the headlines.” This scrutiny is likely to intensify as refinancing hurdles mount. The skyline reveals a patchwork of risk, not a uniform threat.

Distress levels, measured by loans in special servicing or default, have accelerated in the office and retail sectors, per Trepp’s October 2025 update. Office distress rates remain the highest, driven by persistent occupancy challenges and muted leasing demand. Retail follows, as e-commerce and shifting consumer patterns continue to undermine legacy centers. By contrast, industrial and multifamily assets exhibit relative stability, with lower distress rates and steadier cash flows. The outcome: lender risk appetites are fragmenting by property type and geography.

Life insurance companies and banks, with outsized portfolios of maturing loans, are at the forefront of recalibrating risk policies. MSCI data shows these institutional lenders are most exposed in core urban markets, where office and retail distress is concentrated. Regional banks, meanwhile, may face acute pressure in non-gateway cities with higher default rates. Should refinancing options narrow, some lenders may favor workouts or short sales over outright foreclosures, particularly where asset values remain uncertain. The capital stack is growing more defensive.

Geographic and sectoral distinctions are increasingly important as distress rates diverge. Major coastal cities show deeper office distress, while some Sun Belt markets see multifamily and industrial loans performing closer to par. Lender exposure profiles differ accordingly: CMBS pools skew toward urban office, whereas banks and life companies hold more diversified—yet still vulnerable—portfolios. If distress intensifies in lagging metros, risk-adjusted pricing could widen further, pushing capital to more resilient asset types.

Looking ahead, refinancing risk will remain a defining pressure point for U.S. CRE, especially under persistent higher rates and uneven demand. Should policy rates stabilize or decline modestly, some maturities could be managed through extensions or restructured terms—though lender willingness is likely to hinge on asset performance and local fundamentals. Capital allocation strategies will diverge further by property type, with office and retail requiring the most rigorous due diligence. Distress may persist into late 2026 unless absorption and transaction volumes rebound. The next cycle will reward discipline and differentiation.

Liquidity isn’t risk-free—when maturities cluster, capital reveals its true price.