The CRE Maturity Wall An Expert Protocol for Community Banks
The Strategic Mandate
Community banks face a critical challenge as a wave of commercial real estate loan maturities approaches. To provide clarity, we posed a central question to our network of industry principals:
"What Step Should Community Banks Prioritize to Prepare Their Balance Sheets for the Potential CRE Maturity Wall, and Why?"
The following on-the-ground intelligence from market leaders provides a definitive, three-part protocol.
Protocol #1: Run Stress Tests and Triage Borrowers
Running my own commercial real estate lending firm, I found stress testing was a game-changer. When rates spiked last year, we ran a few scenarios and uncovered risks we hadn't considered, especially with certain property types. Banks should identify which borrowers will face the most refinancing pressure and work with them now, not when the loan matures. Start by modeling higher vacancies and lower property values. That shows you what you're actually up against.
— Edward Piazza, President, Titan Funding | LinkedInProtocol #2: Require Documented Liquidity for Shortfalls
Demand immediate cash reserve plans from every CRE borrower--not generic escrows, but specific documented sources for refinancing shortfalls. I wrote about this exact issue in our investment mistakes article: investors constantly underestimate how fast they'll need capital when problems hit. Right now, with rates at 7%+ and property values compressed, the gap between what a property will appraise for and what the existing loan balance is will require fresh equity injections that most borrowers haven't planned for. We're seeing this play out in real-time in Baltimore... One of our management clients just had to source $340K in 45 days because their refinancing came up $400K short of payoff and the bank wouldn't extend without a major principal pay-down. They had no plan and nearly lost the building. Make borrowers show you--in writing, today--where they'll get 15-20% of their loan balance in cash within 90 days... The borrowers who survive 2026 won't be the ones with the best properties--they'll be the ones who can write checks when the math doesn't work.
— Arthur Putzel, Principal & Broker, Trout Daniel & Associates | LinkedInProtocol #3: Start Early with Modification Talks
The single most effective move is proactive loan modification conversations starting Q1 2025--not waiting until maturity. ...Banks are already modeling their CRE exposure internally. If you wait until 2026, you're one of hundreds in their workout queue. Come to them in early 2025 with clean financials, a realistic cash flow model, and modification proposals, and you're a partner solving their problem--not another fire to put out. I've seen this timing difference save clients 150+ basis points... Build your model now, stress-test it against higher rates, and get on their calendar before summer.
— Michael J. Spitz, Principal, SPITZ CPA | LinkedInThe Advisor's Mandate: Executing the Exit
This expert analysis provides the definitive "early warning" protocol. Once a bank has run stress tests, identified at-risk loans, and determined a workout is not the optimal path, the final step is a strategic exit.
This is where our Off-Market Protocol provides the solution. We take the identified non-performing assets and execute a confidential, private treaty sale to our network of vetted institutional buyers. This allows the bank to bypass the REO trap, clean their balance sheet, and convert a high-risk liability into immediate, certain capital.
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