Monday Market Moves | Week of October 13, 2025

Welcome to Monday Market Moves, the weekly series from Essex Capital Markets briefing you on Chicago commercial real estate capital markets. We cover key trends in CRE debt, refinancing, and capital structures to help investors, borrowers, and lenders navigate today’s CRE financing Market.

This Week: Confronting the CRE Maturity Wall – Risks, Opportunities & Chicago Signals

In this week’s market update, we examine a critical structural challenge reshaping the industry: the CRE maturity wall. Far from abstract financial jargon, this phenomenon represents a rolling wave of loan maturities that will test the resilience of property owners, institutional investors, and lenders throughout 2025 and beyond. Understanding where pressure points exist and where opportunities emerge, is essential for anyone managing commercial real estate assets or capital in today’s market.

National Landscape: A Wave of Loan Maturities

According to S&P Global, about $950 billion in CRE mortgages were scheduled to mature in 2024, with projections showing peaks of $1.15-1.26 trillion in the years ahead. The Mortgage Bankers Association reports that 20% (~ $957 billion) of outstanding commercial mortgages are set to mature in 2025.  Broader credit markets echo the stress. The Bank of New York Mellon’s (BNY) “Great Wall of Maturing Credit” article highlights how high-yield and leveraged credits due in 2025 and beyond must contend with elevated funding costs, sticky inflation, and tighter capital conditions.

Industry analysts estimate that over $1.5 trillion in CRE loans will mature by the end of 2026. These numbers indicate that we’re not facing a single “cliff,” but rather a rolling maturity wave – one that will stress certain asset classes and geographies harder than others.

Chicago Signals: Mixed Strengths, Sector Variances

The Chicago market offers a clear example of national trends, some sectors showing resilience, others under pressure.

Multifamily: Holding Strong

Multifamily remains a stabilizing force. CoStar and JP Morgan data suggest Chicago’s multifamily market has limited oversupply, supporting rent growth and moderate vacancy. Multifamily borrowers with solid management and reasonable leverage are finding refinancing windows remain open.

Industrial: Outperforming

Industrial rent growth in Chicago recently outpaced national averages at 3.3% year-over-year. The region’s role as a logistics hub supports e-commerce and manufacturing demand. Well-maintained assets in strategic submarkets attract institutional capital and healthy tenant demand.

Downtown Office: Still Challenged

CRE leasing totaled 4.1 million square feet in the first half of 2025, up 3.4% year-over-year but still below pre-pandemic levels. Many office loans maturing in 2024-2026 were underwritten on higher occupancy and rent assumptions than current market conditions support. This gap between original underwriting and current reality creates significant refinancing challenges.

Suburban Office: Tale of Two Markets

Class A properties in strong submarkets are tightening with competitive tenant demand. Older Class B and C properties in secondary locations face pressure to reposition or upgrade. This bifurcation rewards well-maintained properties and punishes under-capitalized assets.

Tenant Preference Shift

Tenant demand continues to shift towards quality, professionally managed, energy-efficient properties. Buildings with modern systems, collaborative spaces, and sustainable certifications attract better tenants at stronger rents. This trend directly impacts refinancing decisions as lenders factor in tenant retention and rent resilience.

Chicago’s diversity across asset types provides both resilience and complexity, underscoring the importance of local expertise.

Where the Pressure Falls and What Opportunities Are Emerging

Areas under pressure:

• • • Office collateral under maximum stress. Many loans are maturing in an environment of high vacancy, evolving work trends, and discounted valuations.
    • Smaller and undercapitalized owners. Properties with limited cash flow or deferred maintenance may struggle to refinance under stricter underwriting.
    • Assets with weak capital stacks. High leverage or short-term debt structures are receiving greater scrutiny.

   

  Emerging opportunities:

  Over the past few years, lenders (particularly banks) have been able to “pretend and extend” loans that might have, in previous market cycles, been more severely criticized. This practice seems to be occurring less often as we head into the 4^th quarter of 2025, indicating more of the same for 2026. As it seems to be the case, this shift in lender attitude and approach continues, and more loans are accounted for on a more realistic basis, opportunities will emerge, such as these described below:

  Bridge-to-permanent financing. Stabilized multifamily properties seeking interim solutions before permanent refinancing can access bridge capital at competitive rates, allowing time for operational improvements that justify higher rents on permanent debt.

  Joint venture recapitalizations. Strong operators with depleted equity can partner with institutional capital while retaining operational control, allowing for extended runway and shared upside.

  Distressed acquisitions and note sales. Investors with capital and underwriting discipline can acquire quality assets or non-performing loans at attractive entry points where others see obstacles.

  Value-add strategies. Strategic capital deployment for tenant improvements and system upgrades in industrial and suburban office can drive rent growth and improve lender reception.

  Local market expertise. Deep knowledge of Chicago’s submarket dynamics, zoning, tax incentives, and institutional capital networks provides material competitive advantage.

  How Essex Capital Markets Is Navigating This Moment

  At Essex Capital Markets, we view this period not as a crisis but as a strategic inflection point. Our approach includes:

  Proactive debt maturing planning. Exploring extensions, refinancing options, equity recapitalizations, or operational improvements well ahead of deadlines.

  Source alternative capital. Where traditional lenders are limited, we identify bridge lenders, mezzanine providers, preferred equity options.

  Rigorous underwriting. Our analysis of Chicago’s submarkets, rent comps, and absorption data informs stress-tested financial models across multiple scenarios.

  Connect capital to opportunity. We leverage relationships with regional banks, private lenders, and institutional investors actively lending today to move quickly and structure creative solutions.

  Bottom Line:

  Timing and Preparation Define Advantage

  The maturity wall is real and will persist through 2026. But major refinancing cycles also create opportunities for disciplined investors and operators. Early planning, transparent assessment of property fundamentals, and willingness to adapt capital structures will separate those who weather the cycle from those who thrive through it. Chicago’s diversified economy, strong multifamily base, and steady industrial growth provide stability amid market recalibration. Selective opportunities exist for investors willing to execute.

  If you’re facing debt maturities, refinancing challenges, or exploring strategic capital opportunities, contact Essex Capital Markets.

  Sources:

  • • • S&P Global: Commercial Real Estate Maturity Wall—$950B in 2024, Peaks in 2027
      • Mortgage Bankers Association: Commercial Real Estate Loan Maturity Volumes
      • BNY: The Great Wall of Maturing Credit
      • PB Mares: Preparing for the CRE Maturity Wall
      • JP Morgan: Chicago Multifamily Market Outlook
      • Cawley CRE: 2025 Industrial Commercial Real Estate Market Update
      • Avison Young: Chicago Downtown Office Market Report
      • Colliers: 2025 Q2 Chicago Suburban Office Report
      • Crain’s Chicago Business: Commercial Real Estate 2025 Trends

   

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