The beleaguered office market, already dealing with flat utilization, falling values and elevated interest rates, now faces rising defaults and delinquencies as hundreds of billions in office loans are set to mature over the next few years.

More than $260 billion of office loans – representing 30% of the total amount– have either recently matured or are maturing by the end of 2026, according to CommercialEdge's July 2024 office market report. Atlanta has the highest concentration of maturing loans with 43.8% of its office loan volume having recently matured or due to mature by the end of 2025. Denver, Nashville, Chicago and Minneapolis-St. Paul round out the top five markets with high concentrations of maturing loans.

These maturing loans are adding to a precarious situation for the office sector, which recorded $187 billion of new office delinquencies in June, pushing the sector's delinquency rate to 7.5%, according to Trepp. Discount purchases have been increasing, and CommercialEdge said it expects all-cash sales to rise as lenders aim to decrease their exposure to the sector.