The pattern of analyzing CRE loans of late has been shaking heads at the progress of maturing office properties and taking some solace in some other property types like office. But in what Moody's Analytics CRE called an October surprise that had nothing to do with a political election, the tables turned. Office improved while multifamily weakened.

"In October, only $366 million of CMBS office debt reached its fully extended maturity date," said the Moody's report. "The payoff rate for October came in at 38.8%, the highest monthly rate since June. As a result, the year-to-date (YTD) payoff rate climbed slightly to 31.6%. Of the loans that have failed to pay off at maturity in 2023, just less than half have managed to secure formal extensions from special servicers." There was also a maturing loan that was liquidated at a 55% loss.

On the other hand, for the second month running, multifamily saw a falling payoff rate to a much higher degree than the improvement in office. Although for most of the year the rate had easily topped 90%, in September it fell to 71.7%. October brought it further down to 48.8%. "Not only did more than half of the loans in October fail to payoff, the October maturity defaults of $303 million make up over half of the $600.3 million of loans that have failed to payoff all year," they wrote.