The U.S. commercial real estate (“CRE”) market is facing a wave of demand with more than $2.9 trillion in mortgage loans maturing from 2025 through 20291.
How we got here:
- The U.S. Federal Reserve implemented a Zero Interest Rate Policy (“ZIRP”) following the onset of COVID-19, which lead to a record $891 billion of commercial real estate debt originations in 20212.
Navigating the current landscape:
- Loans originated during the post-COVID ZIRP era are maturing in an elevated interest rate environment, which has driven property values down by 18% from peak levels3. This has also curbed debt originations (down to $429 billion in 20232 and $498 billion in 20242) as lenders are saddled with underperforming loans, pushing forward and lengthening the maturity wall.
Looking ahead:
- Prospect Credit REIT, LLC (“PCRED”), a non-traded REIT managed by an affiliate of Prospect Capital Management, L.P. (“Prospect”), is not encumbered by legacy liabilities. We believe that PCRED is well positioned to capitalize on future refinancing opportunities in the CRE market.
For more information, contact Matt Krugman at the following: mkrugman@prospectcap.com
[1] MBA, Newmark Research as of 2/10/2025 | [2] Mortgage Bankers Association’s (MBA) 2023 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation | [3] Green Street CPPI Index through 5/2025
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