Trillions of dollars in commercial real estate loans are approaching maturity, and the pressure is building on investors who financed properties during the low-interest-rate era of 2020 and 2021. Jerry Larkowski, a dual-licensed attorney and managing broker at ESQ. Realty Group, LLC in Little Rock, Arkansas, has been tracking the trend as balloon payments come due. "There is about $3 trillion worth of commercial debt out there that had its genesis in the low rates of 2020, 2021 and early 2022 that are now coming due, and the rates are a lot higher," Larkowski said.
According to the Mortgage Bankers Association, approximately $875 billion in commercial and multifamily loans are expected to mature in 2026 alone, with analysts projecting more than $4 trillion in CRE debt coming due between 2025 and 2029. The wave is not cresting; it is still building.
When a balloon payment arrives, investors face three options, none of which are easy. Paying off the loan in full drains capital that could be deployed elsewhere. Refinancing means locking in a rate materially higher than five years ago, squeezing margins. Selling works when buyers are ready, but Larkowski notes that many investor sellers are entering the market while buyers pull back. "If everybody's selling, the demand isn't really any higher, the supply is higher, which means people are either going to have to wait a longer period of time to sell or they're going to have to lower their price," he said.
In Arkansas, Larkowski observes that many properties hitting the market are single-family rentals financed like commercial assets. "Rent houses, in a way, are commercial. They may be residential structures, but to the investors, they're commercial. They're doing it for a profit," he explained. This shift could create an opening for first-time homebuyers and owner-occupants who have been priced out or sitting on the sidelines, as more inventory becomes available from investors exiting positions they can no longer hold profitably.
Larkowski is not predicting a collapse but describes a forced correction among investors who took on leverage without planning for rate changes. "If you're a wise investor, you kind of prepare for these things. You know that these things are going to happen. And if you're a good investor, you'll land on your feet no matter what," he said. Some investors are selling lower-priority properties now and using proceeds to shore up debt on assets they want to keep—portfolio management rather than distress.
The ones most at risk are those who refinance into higher rates, absorb margin compression, and then face the additional pressure of raising rents in a market where tenants have more choices than two years ago. The maturity wall is not a single event but a rolling pressure playing out over several years. For buyers in Central Arkansas and nationally, the practical implication is straightforward: more inventory is coming, investor competition is softening, and negotiating room for patient buyers is real. The most avoidable mistake, Larkowski suggests, is waiting for perfect conditions while the opportunity is present.
