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Background

Guardrail Finance is both a financial intermediary for multifamily and commercial real estate loans and a Sponsor of real estate equity syndications.

Interest Rates

The Borrower Challenge: Rising Refinancing Risk in 2025

Commercial and multifamily real estate investors are facing one of the most pressing challenges in years - the wave of loan maturities on previously low-rate loans.

As nearly $500 billion in U.S. commercial mortgages mature in 2025 — with 14% underwater, default risk is rising sharply according to PWC. Multifamily properties, once a consistent safe haven, now show CMBS distress rates jumping from 2.6% to 12.9% year-over-year.

Many lenders are responding with caution—but also renewed appetite, especially for those refinancing existing loans. Yet 2025 still has significant refinancing headwinds, especially for borrowers hit by declining property values, rising interest rates, and tightening lending criteria.

Why the Crisis Is Escalating

Several converging trends heighten risk:

Underwater Loans - With rising cap rates and falling asset prices, nearly one-in-ten apartment loans mature underwater — a major refinancing obstacle .

Loan Maturity Cliff - 2025 and 2026 are replete with expiring debt—as much as $1.8 trillion in commercial mortgages awaits renewal.

Higher Rates & Tighter Credit - Cap rates have widened, at least anecdotally, in response to global uncertainty. Lenders are demanding higher returns, raising the bar (aka credit spreads) for borrowers.

Distress in Multifamily - Sectors once viewed as defensive now show rising distress—particularly in pre-2022-rate deals.

A Guiding Framework to Weather the Storm

• Proactive Loan Management & Refinancing - Assess upcoming maturities and the debt service implications. Seek to lock in terms while still competitive, before rates climb further.
• Restructure with Non-Recourse Debt - Whenever possible, secure non-recourse financing. Non-bank lenders are offering improved LTVs, especially for stabilized multifamily assets, even amidst tightening credit standards.
• Reduce Risk Through Portfolio Diversification - Avoid putting all your eggs in one asset type or geography. A well-diversified real estate strategy balances risk – from apartments to industrial/logistics, and includes geographic spread.
• Partner with Experienced Operators - Work with syndicators who have weathered economic cycles. Strong Sponsors matter especially when refinancing distressed assets or repositioning properties.

A Solid Action Plan

• Inventory Your Debt - identify maturing loans and assess risk.
• Engage Early - talk to lenders well before maturity.
• Consider All Capital Options - depending on your situation, we can advise on permanent loans, bridge loans, preferred equity, and mezzanine financing.
• Work with Seasoned Partners - choose operators with proven ability to execute through cycles.

Final Thoughts

2025 presents a real challenge to CRE and multifamily borrowers. Informed, proactive investors will not only survive, but also use the dislocation as a chance to strengthen their position.

Let’s talk about how we can position your project to take advantage of today’s market conditions.

Email me at robert@guardrailfinance.com to start the conversation and explore upcoming financing opportunities tailored to your goals.

Now is the time to act — and I’m here to guide you every step of the way.

Best regards,
Robert Newstead

Navigating the Market with Guardrail Finance

At Guardrail Finance, we specialize in arranging financing on behalf of clients and in syndicating real estate investments on behalf of investors to help you capitalize on opportunities in multifamily, affordable housing, medical office, and industrial properties.

​Contact Guardrail Finance to assist with arranging your Multifamily & CRE Financing​

​Partner with Guardrail Finance to unlock opportunities in workforce housing, medical office, NNN, and industrial real estate​