Facing a Loan Maturity? Your CRE Refinance Playbook

Loan coming due on your commercial property and not sure how to refinance in today’s market? You’re not alone. Many owners are meeting maturities with higher rates, tighter lending, and shifting values. Here is a practical playbook to evaluate your options and keep your deal on track. Start early and quantify your numbers Open a runway with your current lender and alternate lenders well before maturity. Gather current rent rolls, year-to-date and trailing-12 (T-12) operating statements, the last two years of P&Ls, property tax and insurance bills, and a capex log. Recast net operating income (NOI) realistically. Most lenders will haircut income for vacancy and credit loss and will underwrite reserves for taxes, insurance, and repairs. Calculate debt service coverage ratio (DSCR) by dividing NOI by annual debt service and estimate loan-to-value (LTV) based on probable appraised value. Lenders generally want DSCR comfortably above 1.20x with a conservative LTV for the asset type and market. Know your refinancing lanes - Banks and credit unions: Good for stabilized properties with strong DSCR and local banking relationships. Full or partial recourse is common. - Life companies and CMBS: Typically target well-located, stabilized assets and require strong tenancy; non-recourse is possible, but underwriting is strict. - SBA 504 or 7(a) for owner-occupied: If your business occupies 51 percent or more, SBA options can extend amortization and reduce equity requirements compared to some conventional loans. - Private credit and debt funds: Faster decisions, more flexibility on DSCR and property story, but expect higher rates and fees. - Bridge loans: Short-term financing to stabilize occupancy, complete renovations, or season new leases with a defined exit strategy. - Hard money: Last-resort capital for timing gaps or distressed scenarios; use sparingly and with a clear exit. Right-size the capital stack If today’s value or NOI will not support a full takeout, consider a cash-in refinance, mezzanine debt, or preferred equity to bridge the gap. Adding a strong guarantor or accepting partial recourse can expand options. Interest-only periods on a bridge loan can improve DSCR while you execute a leasing or renovation plan. Be realistic about the timeline required to hit stabilization milestones. Work with your existing lender If refinancing terms fall short, engage your current lender early. Ask about extension options, partial paydowns, or a re-margining plan. Some lenders will convert to interest-only for a period, bifurcate the note (A/B structure), or grant short forbearance while you firm up a replacement loan or sale. Transparent reporting and a credible action plan matter. Tighten leasing, expenses, and documentation - Leasing: Prioritize renewals for near-term expirations, convert month-to-month tenants, and address delinquencies. Estoppel certificates (tenant confirmations of lease terms) help lenders validate income. - Expenses: Scrub your NNN or CAM reconciliations and vendor contracts. Normalize any one-time costs and document savings achieved. - Maintenance: Tackle critical deferred items that show up in appraisals or property condition assessments (roof, HVAC, life safety). A clean report protects value and underwriting. Prepare for third-party reports Most lenders will order an appraisal, a Phase I Environmental Site Assessment (to flag recognized environmental conditions), an ALTA survey, title work, and sometimes a zoning or code compliance report. Address known issues in advance, such as expired permits, encroachments, or historical spills that may require a Phase II. Proactive cures keep timelines intact. Expect valuation to reflect today’s cap rates Cap rates have adjusted in many markets, and appraisals are sensitive to lease quality, rollover risk, and market rents. If value lands below expectations, revisit your options: partial paydown, bringing in a partner, executing value-add items before closing, pursuing a bridge loan, or pivoting to a sale or sale-leaseback. If selling, coordinate timing with a potential 1031 exchange to preserve flexibility. Build a lender-ready package - Executive summary outlining property, market, tenancy, and the story behind your refinance. - Current rent roll with lease expirations and options. - T-12 and two years of historicals, reconciled to tax returns. - Copies of major leases, amendments, and SNDAs if applicable. - Evidence of insurance with required lender coverages. - Capital improvements list with invoices and warranties. - Borrower and guarantor financials (personal financial statement, real estate owned schedule, liquidity). - Business plan with timelines and measurable milestones for any bridge or value-add strategy. Set a realistic timeline From term sheet to closing, underwriting, third-party reports, and legal can take weeks to months, depending on lender type. Build in contingency for appraisal turn times and document collection. Keep communication frequent and factual to avoid surprises. Bottom line You have options even in a tighter market. Start early, underwrite your numbers the way a lender will, and choose the lane that matches your property’s condition and your business plan. For nuanced questions about loan structure, tax treatment, or legal terms, consult a qualified commercial real estate professional, lender, attorney, or tax advisor.