A $600 billion problem lurks in commercial real estate as Fed mulls when to cut rates

International news
Landlords with big bills coming due on commercial buildings will be listening closely to what Federal Reserve Chairman Jerome Powell has to say about interest rates Wednesday afternoon.

With deal activity depressed, property values sagging and at least $600 billion of maturing mortgage debt this year, the potential for more weakness in the banking sector has been a clear focus for regulators.

To help illustrate the issue, MSCI has broken down how much CRE debt is coming due in the next few years, by lender and property type, a guide to where potential weakness might lurk.

Wall Street's bond machine created a big slice of the overall debt coming due in 2024, but so did big and small banks. A closer look at the debt coming due shows that roughly $200 billion in 2023 was likely extended, kicking some problems down the road. By property type, the most debt this year will be coming due on apartment buildings, hotels and offices.