America’s big money apartment landlords are staring down a looming debt, the Wall Street Journal warned on Monday.
The alert lands days after the Federal Reserve raised interest rates for the first time since 2023. Apartment owners owe more than $1.8 trillion over the next decade, with roughly $757 billion coming due by 2028 — “more than any other commercial real estate sector,” per the Mortgage Bankers Association.
The mortgage math has turned brutal under President Donald Trump, with the economy souring and money becoming tight.
Landlords who locked in loans in 2020-2021, when apartment rates sank to roughly 3%, are now being forced to refinance at nearly double that. Back then, apartments were the “hottest bet in commercial real estate” while offices and hotels struggled through remote work and dead pandemic travel.
“There was a sense of relative euphoria,” Mike Wolfson, Newmark’s managing director for multifamily capital-markets research, told the Journal. “But things turned very quickly.”
A construction boom across Sunbelt cities like Phoenix, Denver, Atlanta and Austin flooded the market with luxury units nobody could fill. Now those same landlords are selling at a loss, handing keys back to lenders, or scrambling to cover ballooning mortgage payments, mirroring the housing crisis of 2008.
“The chickens are coming home to roost for a lot of people,” Sean Burton, CEO of multifamily firm Cityview told the Journal.
Lenders who spent years extending loans, hoping rents would rebound, are “losing patience” the Journal reported.
“Lenders have gotten a lot more aggressive,” said Ryan Cotton, Bain Capital’s head of real estate. “That could lead to some real turbulence as you see distress start to manifest.”
It’s another headache for President Donald Trump, whose demands for lower rates were overruled by the Fed, even as analysts warn inflation itself looks like a “runaway train.” A looming commercial real estate reckoning, forecast for years, is now arriving all at once.
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