AriZona Real Estate insider!

The commercial real estate (CRE) sector is witnessing an unprecedented surge in loan extensions, with a staggering $384 billion deferred into 2025—a significant jump from the $270 billion extended into 2024. According to Aaron Jodka, Director of Research for U.S. Capital Markets at Colliers, “Lenders extended $384 billion in loans into 2025, surpassing 2024 levels, with 40% of maturities now deferred.“

A closer examination reveals that commercial mortgage-backed securities (CMBS) and bank loans are at the forefront of these extensions. Jodka states, “54% of 2025’s CMBS maturities ($125 billion in extensions) were due in prior years, while bank loans clock in at 44% ($199 billion).”

Among asset classes, multifamily properties experienced the highest volume of extensions, totaling $97 billion, while office properties had $85 billion extended. Jodka also highlights an emerging trend in industrial properties, noting that “loan extensions for industrial properties stand out, with 55% of 2025 maturities pushed from prior years—the highest share of any asset class.”

While some lenders are starting to enforce sales and foreclosures, a significant portion of the 2025 maturities is anticipated to be further deferred into 2026 and beyond. Jodka observes, “Lenders are beginning to respond to market conditions and price adjustments by forcing sales, foreclosing, and seeking alternatives beyond renegotiated loans. Still, $957 billion in loans will not pay off this year, and a meaningful share will be pushed into 2026.”

2008 Déjà Vu? The Similarities Are Unsettling

1. Delaying the Inevitable – Just like in 2007-2008, lenders are rolling over debt rather than addressing the root problem: properties losing value and cash flow.
2. CRE Facing a Reckoning – Back then, subprime residential mortgages were the ticking time bomb. Today, commercial mortgage-backed securities (CMBS) are the weak link, especially in office and multifamily properties, where defaults are rising.
3. Banking Sector at Risk – Regional banks are particularly exposed, much like mortgage lenders were in 2008. Some banks are extending loans just to avoid reporting losses, a dangerous game if property values keep dropping.

Why This Might NOT Be Another 2008

1. No Mass Subprime Crisis – In 2008, reckless lending created systemic risk across the economy. Today’s crisis is mostly contained within commercial real estate, meaning it might not trigger a full-blown financial collapse.
2. Stronger Banking Regulations – Post-2008 regulations forced banks to maintain better balance sheets, which could limit the damage.
3. Interest Rates Are the Real Villain – Unlike 2008’s bad loans, today’s issue is the cost of refinancing due to high interest rates. Many property owners can’t afford to roll over debt, leading to extensions or potential foreclosures.

So… Where’s the Next Michael Burry?

In 2007, Michael Burry saw the subprime crisis coming and placed massive bets against the housing market, making billions when everything collapsed.

If history is any guide, someone out there—maybe Burry himself—is already shorting the commercial real estate sector as we speak.

With CRE loan extensions piling up, property values slipping, and foreclosures rising, it’s only a matter of time before reality catches up. The question isn’t if a reckoning is coming—but who’s already betting against it?

Could Burry be watching this unfold, just like he did in 2008? If so, the smart money isn’t waiting for the inevitable… it’s profiting from it.

I’ve been hearing about these loans coming due for some time now, and if you follow this blog, you’ve probably read a few posts about it already. But now, they’re extending them again—kicking the can further down the road. At some point, though, those loans will have to be paid, and that’s when all hell will break loose. The only scenario where they wouldn’t keep extending is if the economy were already in a full-blown recession, and that’s not exactly a great alternative. After living through 2008 and seeing so many families lose everything, I truly hope we don’t go down that path again. But if we are, and the commercial real estate market crashes, the fallout will be devastating.

If I knew how to short the market, I’d definitely be looking into it. The problem is, you need money and patience to weather the storm because nobody knows exactly when it will happen—if it does at all. With loans being extended again, I don’t see anything major happening this year, but that just means there’s time to prepare and figure out a way to be on the right side of it when the reckoning finally comes.

At the end of the day, the safest bet is to spend less, live within your means, and save all you can—because when things do go sideways, it’s those who are prepared that will be able to weather the storm. Be ready.

– Juan C Pesqueira