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During the late 2010s and early 2020s, low-interest-rate mortgages and short-term loans were rampant. However, the Federal Reserve’s rapid increases in the Effective Federal Fund Rate in 2022 and 2023 sparked fear that refinancing these loans would be difficult once they matured. This has led to several years of gloom-and-doom prophecies about the “wall of debt” or “wall of maturities” and the resulting commercial real estate distress.

With the calendar flipping to a new year, the “wall of debt maturities” prediction is back once again, as are the fearful connotations. However, experts told Connect CRE that the problem has been somewhat overstated.

“Approximately $539 billion of CRE debt will mature in 2026, compared to a 20-year average of roughly $350 billion,” said Steve Buchwald, Institutional Property Advisors’ Senior Managing Director, Capital Markets. Yes, the debt amount is elevated. On the other hand, “this is meaningfully lower than the nearly $957 billion that matured in 2025,” Buchwald pointed out.

As such, while the “maturity wall” exists, “it’s starting to look like the so-called ‘retail apocalypse,” commented Ralph Rader, director of debt placement with Greysteel. “That ended up being a managed threat, rather than a sudden crash.”

Distress: The REAL Story

So, the “wall” is real. But does it mean a plethora of distressed commercial real estate? The simple answer is yes . . . but not necessarily a plethora.

On the one hand, increasing distress is a thing. Colliers’ Senior National Director of Research Steig Seaward explained that distress is gaining momentum across asset classes, with office remaining the most affected, “facing persistent vacancy pressure and refinancing challenges.”

Buchwald agreed, noting that CRE distress is estimated at approximately 11.6% “with the office sector driving much of the increase and distress rates roughly five percentage points higher than other property types.”

But . . .

The current distress and its resulting foreclosures and givebacks aren’t anywhere near the level experienced in the aftermath of the Great Financial Crisis (GFC).

“Distress is rising, but it’s been more of a steady grind than a spike,” said Robert Durand, KBS’s Executive Vice President of Finance. Katherine Bissett with Cox, Castle & Nicholson took it one step further. While rising distress likely won’t be an issue in 2026, “there are still a number of troubled assets that need to work their way through the system in some form or fashion,” said Bissett, who is a partner with the firm.

Furthermore, the current distress is very different from the GFC’s troubled real estate asset issues, which included underperforming assets. According to David Pittman, head of capital markets with Bonaventure, “what we have seen is more ‘distressed seller’ situations than ‘distressed properties’.”

Rader added that in many cases of distress, the underlying assets are performing well. When it comes to the capital stack, not so much. “Owners and investors just need more time, or a fresh layer of equity to heal the wounds left by short-term bridge debt and operational headwinds,” he observed.

Durand agreed, explaining that stress tends to take place among assets in which the capital stack doesn’t pencil anymore. “These situations usually need a reset or repositioning, and there’s no getting around some level of pain,” he added.

Finally, lenders that aren’t interested in commercial real estate ownership are working consistently with borrowers, allowing modifications, extensions and restructurings. The result is a maturity wall that is pushed out to the future and “true distress limited at the asset level,” Pittman said. Added Fidelity Bancorp Funding CEO David Frosh: “So far, kicking the can down the road has helped.”

Breaking Through the “Wall”

So yes, the wall is real. But the experts point out that lenders and borrowers continue to engage in various methods to kick the maturity issue down the road. According to Durand, workouts, extensions and restructurings will remain dominant strategies in 2026.

Buchwald agreed, adding that there’s plenty of capital to support those efforts. Furthermore, “we’re also seeing more creative solutions—lenders restructuring the loan into a performing tranche and a future upside tranche, while allowing new equity to enter in the middle with a priority return ahead of the upside tranche,” he explained.

Frosh also said he believed that recapitalizations and rescue capital will take a larger role in 2026, adding that “this cycle is defined by renegotiation, rather than failure.”

Still, Durand explained that lenders might be less willing to grant repeated short-term extensions in 2026 than they have been in previous years. “The trickiest situations are the in-between assets, those that are still generating income today, but are vulnerable to market shifts and occupancy changes,” he added.

While the current ‘debt wall’ might remain painful, Bissett observed that it has led to a basis reset. As a result, “investors can find a way to make these assets pencil once again,” she said. “This repricing allows disfavored assets, like office, a better opportunity to find capital in 2026.”

Source: “The CRE Debt Wall Looms Once Again: But Don’t Panic“

A trio of local developers is partnering on a mixed-use development in Rio Rancho to bring single-family homes, rentable units and commercial development to the City of Vision.

The development, which is in the early stages, is a joint venture between Pierre Amestoy, Kipp Watson and Jason Buchanan for the mass grading and backbone infrastructure of the development near the corner of state Route 528 and Sundt Road, Amestoy said.

Amestoy will be the residential developer, Watson will be the commercial developer and Buchanan will be the multifamily developer, Amestoy said.

The commercial area, which will be 25 acres, could include retail, a motel and a gym, among other uses under consideration.

Another 30 acres of the property will have 394 townhomes that will be four-plexes and six-plexes for rent, and the east portion of the property will have 85 single-family lots for purchase.

Amestoy estimates the rentable units will range in size from 1,100 square feet to 1,650 square feet with one-, two- and three-bedroom options. The multifamily section will also have a community center.

Construction is currently underway, as grading is being completed now, and the plans are to begin infrastructure work in February, Amestoy said.

The partners hope to have the site ready for vertical construction early in the third quarter of 2026.

Amestoy is also working on the Zuma Ranch and High Range Six single-family residential projects and another mixed-use project on Albuquerque’s west side on Seven Bar Loop Road, previous Albuquerque Business First reporting shows.

Source: “Trio of developers partner on Rio Rancho project with homes, rentals and retail“

Big-box retail exits, demand for medical office space and continued low industrial vacancy rates dominated 2025 headlines and commercial real estate trends in Albuquerque.

Last year also saw the continuation of the medtail trend, the repositioning of office assets into other uses and the flight to quality across multiple asset classes.

Albuquerque Business First spoke with industry experts to discuss some of the state’s largest upcoming projects in each asset class and what they think the biggest trends will be in the 2026 commercial real estate market.

Retail

The Albuquerque retail market saw a flurry of big-box retail spaces come available in early 2025, including former Big Lots, Joann Fabrics and a Party City.

And since then, there’s been strong absorption of those big-box spaces, according to NAI SunVista retail broker Ethan Melvin.

Burlington occupied a former Northeast Heights Big Lots location, Black Friday by ABQ Crazy Liquidation occupied a former Joann Fabrics, and an Arc Thrift Stores is set to occupy another vacated Big Lots space, among other examples.

Heading into 2026, Melvin said it’s essential to review macroeconomic indicators and how they will affect businesses occupying big-box spaces.

If it’s a public company, stock performance and quarterly earnings will be strong indicators of the company’s health and its future occupancy of the space.

Several big-box retail spaces still remain available, however, which skews vacancy data. Overall, retail vacancy is still low, although it is trending upward, Melvin said.

The city’s vacancy rate is currently at 7%, according to the most recent data from Colliers New Mexico-El Paso. Previous data showed it was 5.6% at the same time in 2024.

Most vacancies are in older trade areas, such as the Southeast Heights, the University area or Downtown, which have a 16%, 14% and 18% vacancy rate, respectively.

Quality inventory is very tight, though, and it’s still largely a landlord-friendly market, Melvin said. This is demonstrated by the North Interstate 25 submarket, the Far Northeast Heights and Uptown posting vacancy rates of 4%, 3% and 0.7%.

A concentration of vacancies in the Southeast Heights and a tight class A market follow what Melvin said is a flight-to-quality trend in the retail asset class.

This trend is evidenced by Marshalls relocating from the West Cottonwood Shopping Center to Cottonwood Commons, Ethan Allen’s move to Winrock and the leasing velocity at Lobo Crossing, a new class-A retail development.

Melvin anticipates this trend will continue in 2026.

Retail tenants should note that convenience is key for today’s consumer, so fundamentals like business access and nearby co-tenancy should be of utmost importance when considering a new space, Melvin said.

Some of the marquee new retail developments in the metro include the Lobo Crossing Shopping Center, Sunset View and the Glyphs at Volcano Mesa.

Here’s a look at each project:

Office

While many markets saw and continue to see huge vacancies in the office asset class in the wake of the pandemic and the hybrid work model, Albuquerque did not experience such spikes.

And now, the city’s office vacancy rates are actually near what they were before the pandemic, Resolut RE office broker Jeremy Salazar said.

As such, Salazar anticipates savvy office investors will be optimistic and active in 2026, as skepticism is keeping office values down despite vacancy rates being similar to pre-pandemic levels.

“There’s been this idea that nobody is working in the office,” Salazar said. “Banks that lend to investors are still very skeptical about office properties, … but the reality is, especially in Albuquerque, we actually have better vacancy rates than pre-Covid.”

Salazar noted that the downtown submarket was an exception.

For Albuquerque office owners still experiencing high or elevated vacancy rates, Salazar suggested repositioning those offices to medical uses, which are in high demand and low supply.

The city’s low-supply, high-demand medical office situation is exhibited by UNM Hospital and Lovelace Medical Group building new locations in the South Valley and in Bernalillo, respectively.

It’s also somewhat shown by the medtail trend — when medical businesses move into traditional retail spaces — which saw Jorgensen Orthodontics relocate one of its offices to The Shops at Paseo Crossing.

“If you’ve got an office building that’s got a lot of vacant space, repositioning that to be attractive to medical tenants could be a good play,” Salazar said. “They’re just a little more stable, and there’s more demand out there for them.”

In 2026, small to medium office owner-users should plan for six to nine months of renovations and negotiations before moving in after finding a space, assuming things go to plan, Salazar said.

Large users should be looking at a year, he added. It took First American Title a year and a half to find its new space in the north Interstate 25 corridor.

Almost all of the new big-headline office projects are for medical office buildings, and Salazar expects new office construction to continue to be minimal in 2026 due to high construction costs and lack of population growth.

Here’s a look at some of the largest recent office projects: