“When I say you have to fix it in ’26 or lose it, I’m not kidding. There’s no more pretending here, and there is a willing market out there to take your property and a lender who will do it.”
– Michael Cohen, Brighton Capital Advisors
Why the refinancing story is less about “rates coming down” and more about process, patience, and proving a credible plan to the people who control the outcome.
For many commercial real estate borrowers, the next major challenge is not identifying market stress. It is accepting how quickly that stress can turn into a forced decision.
Michael Cohen, Managing Partner of Brighton Capital Advisors, recently joined Seyfarth Shaw’s The Property Line podcast to discuss the current CMBS and CRE CLO maturity environment, the pressure facing borrowers, and why a more aggressive special servicing landscape is changing the playbook.
His message was direct: borrowers need to move early, understand their options, and approach lenders with a credible plan before the loan reaches a point where the borrower no longer controls the conversation.
A maturity environment with less room for error
The current maturity wall is hitting at a time when many loans were originated under a very different rate environment. According to Cohen, a large share of loans coming due were written with coupons far below what is available today. That creates an immediate refinancing gap, even for properties that may still be operating.
The issue is not simply whether a property has value. It is whether the current cash flow, lease profile, asset quality, and market conditions support a refinance at today’s proceeds and pricing.
For borrowers, this can create a difficult situation. A loan that worked several years ago may no longer fit the current debt market. Even stable assets can face pressure if the new loan proceeds are lower, the coupon is higher, or the lender views the property as too risky based on lease rollover, tenancy, occupancy, asset class, or market-specific concerns.
That is why Cohen emphasized the need for borrowers to be both offensive and defensive. Offensive means starting the conversation early, preparing the lender, and presenting a viable path forward. Defensive means understanding the risks of inaction, including the possibility that the servicer or special servicer may pursue remedies that reduce the borrower’s leverage.
Multifamily stress is moving into the spotlight
Office has dominated commercial real estate distress headlines for several years. Cohen acknowledged the continued stress in office, particularly for assets that need to be converted, repositioned, or reset in value in order to attract and retain tenants.
But he also pointed to another area that may deserve more attention: multifamily.
As Cohen put it, “multifamily is hiding in the shadows of office.” His view is that multifamily remains fundamentally sound as a property type, but many loans are overleveraged, especially those originated during the more aggressive financing environment between 2018 and 2023.
That distinction matters. Multifamily demand may still be strong in many markets, but a good asset class does not automatically solve a bad capital stack. When debt proceeds, interest rates, property performance, and required capital improvements no longer line up, borrowers can find themselves with few easy options.
Cohen also noted that CRE CLO loans may face significant challenges, especially where borrowers have run out of capital and there is no clear sale or refinancing market. In those cases, the issue becomes less about long-term fundamentals and more about liquidity, timing, and who has the resources to carry the asset through the next phase.
Office is still under pressure, but not every case is the same
Office remains a major concern, but Cohen’s comments point to a more nuanced picture. Not every office asset is equally distressed, and not every borrower is out of options.
For borrowers who can bring new money, a credible business plan, and a clear strategy, extensions and modifications may still be possible. The challenge is that CMBS servicing is highly structured, rule-driven, and often difficult for borrowers to navigate without understanding how the process works.
Cohen noted that the communication gap between borrowers and CMBS servicers can be wide. That gap can become costly if the borrower waits too long, misunderstands the servicer’s incentives, or approaches the conversation as if the lender will automatically provide more time.
In today’s market, a request for an extension needs to be more than a request for relief. It needs to explain why the borrower remains the best party to protect value, stabilize the asset, and move the loan toward refinance or sale.
Hotels face a different kind of pressure
Cohen also highlighted hotel assets as an area to watch. Hotels are more operationally sensitive than many other property types, and rising expenses, higher financing costs, and pressure on average daily rates can all affect refinancing outcomes.
If business travel slows or consumer demand softens, hotel borrowers may face added pressure just as loans come due. That does not necessarily mean broad distress across the sector, but it does mean lenders may be more selective and borrowers may need to show a stronger operating story.
In this environment, performance alone may not be enough. Borrowers need to explain where the asset is headed, not just where it has been.
Special servicers are becoming more aggressive
One of the most important themes from the conversation was the changing tone among lenders and servicers.
Cohen described a market where lenders are more willing to enforce covenants, pursue fees, and move toward foreclosure when they believe there is a market to sell into. As asset pricing stabilizes and trades occur, lenders gain more confidence that they can take action and recover value.
His warning was blunt: “Fix it in ‘26 or lose it.”
That statement captures the urgency facing many borrowers. The era of simply waiting for rates to fall or hoping the market resets in the borrower’s favor appears to be narrowing. If the asset needs a modification, extension, recapitalization, sale, or other strategic solution, the borrower needs to act before the special servicer controls the pace.
Cohen also pointed out that some loans in special servicing are still performing. In other words, cash flow does not always prevent a loan from getting stuck. A property can be producing income and still face structural, maturity, covenant, or refinancing issues that move it into a more expensive and difficult process.
The 2027 maturity wall is already shaping today’s decisions
Looking ahead, Cohen expects origination volumes to rise because they have to. The 2027 CMBS maturity wall is significant, and it will be compounded by loans that have already been modified or extended.
That creates a crowded refinancing environment. Banks, insurance companies, CMBS lenders, and borrowers will all be selective. Capital will be available for the right deals, but not every asset will qualify, and not every borrower will receive the proceeds they want.
Cohen compared the environment to a game of musical chairs, where borrowers need to “get to your seat or get extended.”
For borrowers, that means timing matters. Waiting until maturity may leave too little room to negotiate. A stronger approach begins earlier, with a realistic assessment of the asset, the loan documents, the market, and the borrower’s ability to contribute capital or present a workable path.
What borrowers should take from this moment
The current market is not defined by one single problem. It is a convergence of higher coupons, tighter underwriting, limited refinancing proceeds, asset class disruption, special servicing pressure, and a growing maturity wall.
For borrowers, the key takeaway is simple: do not treat maturity as a calendar date. Treat it as a process.
That process should begin well before the loan comes due. Borrowers need to understand the lender’s position, evaluate refinancing options, review loan covenants, assess guaranty exposure, and determine whether the best path is a refinance, extension, modification, sale, recapitalization, or negotiated exit.
In a more forgiving market, delay may have been survivable. In this market, delay can reduce leverage.
Brighton Capital Advisors works with borrowers navigating CMBS servicing, special servicing, loan maturities, modifications, and complex debt situations. In a market where the margin for error has tightened, the right strategy often begins with asking the right questions early enough to still have choices.
