A maturity date is the one deadline in commercial real estate that does not care about the market. If you are weighing commercial loan maturing options, you already know the shape of the problem: the balloon is due, the refinance proceeds are short, and the lender’s patience has a date on it. This page lays out the choices without pretending any of them is free.
What a loan maturity looks like in practice
Most commercial loans were never meant to be paid off from operations. A five, seven, or ten-year term with a 25-year amortization leaves a large balloon that the owner expects to refinance. That plan works when rates are flat and values are rising. It stops working when a loan written at one rate has to be replaced by a loan at a higher one and the property’s income has not grown enough to cover the difference.
The refinance gap is the practical result. A building that supported a $6 million loan on a 4 percent note may only support $4.5 million at today’s rates and the lender’s current debt service coverage requirement. The owner is asked to bring the difference to closing in cash, and many cannot or would rather not. Lenders respond with short extensions, sometimes 90 days or six months, often with a fee, a rate bump, a paydown requirement, or new reserves. Each extension buys time, and each one is a reminder that the problem has not been solved.
The second wave of pressure is the maturity wall itself: a large volume of loans coming due in the same period, which means lenders, appraisers, and buyers are all busy at once.
Your options when a commercial loan is maturing
- Negotiate an extension or modification. Lenders frequently prefer an extension to a foreclosure. The terms vary widely, and your loan documents and guaranty control what is possible. Talk to your lender early and involve your attorney before agreeing to new terms.
- Refinance with a new lender. If the property’s income supports the new debt, a refinance solves the maturity outright. Bridge lenders, credit unions, and agency programs each have different requirements, and closing a refinance can take 60–120 days.
- List with a broker. A marketed sale can reach the widest buyer pool and often produces a strong price. The consideration is time: a listing, offer, financing contingency, and closing can run longer than an extension allows, and a buyer’s loan can fall through late in the process.
- Sell directly to DCA. We make cash offers without a financing contingency and typically close in 30–90 days, which can fit inside an extension window. We buy as-is and with tenants in place.
- Hold and bring cash to the table. If you have the capital to pay down the loan to a refinanceable balance and you want to keep the property, this preserves your ownership. It is a legitimate choice when the building is worth keeping.
How a direct sale to DCA works around a loan maturity
Timeline built around the maturity date. Tell us the maturity or extension deadline and any notice periods in your loan. We work backward from that date to set diligence and closing.
No financing contingency. Our offers are cash offers, so the closing does not depend on a third-party lender approving the property a second time.
As-is, tenants in place. We do not ask for repairs or lease changes before closing. Existing leases transfer with the property.
Documentation we need. The loan documents and any extension or forbearance agreements, a current payoff statement or the lender contact who can provide one, a rent roll, twelve months of operating statements, and the leases. If a lender-ordered appraisal exists, it helps.
We are not lawyers and this is not legal advice. Prepayment penalties, defeasance, yield maintenance, guaranty exposure, and lender consent rights all affect what a sale means for you. Talk to your lender and your attorney before committing to any path, including ours.
See multifamily and mixed-use for asset-specific detail. Related situations: need speed and certainty and vacancy and tenant problems. Our process is on how it works.
Can you close before my loan matures?
Our typical close is 30–90 days. Whether that fits depends on your maturity date and how quickly we can complete diligence. Tell us the date at the start and we will be direct about whether it is workable.
What if the sale price will not cover the loan balance?
That is a conversation to have with your lender and attorney before contracting. Some lenders will consider a discounted payoff; others will not. We can provide an offer so you know where you stand, but we cannot advise on the loan.
Does a prepayment penalty or defeasance change anything?
It changes your net proceeds, not our process. Review the loan documents with your attorney so you understand the cost of paying the loan off early.
Will you buy if I am already in default or forbearance?
Often, yes. A property under a forbearance agreement or default notice can still be sold, subject to the lender’s rights. Have your attorney review what the loan documents allow.