SAN DIEGO—Investors, loan servicers and loan originators are just a few of the groups that will be affected by the impending wave of loan maturities, Trigild's president Judy Hoffman tells GlobeSt.com. As she prepares for her firm's 15^th-annual lender conference on October 14-16 here in San Diego, we spoke exclusively with Hoffman about the maturities and other issues impacting the commercial real estate industry.

GlobeSt.com: A wave of loan maturities is expected to hit the market over the next three years. Can you discuss?

Hoffman: A decade ago, during the previous real estate boom, hundreds of billions of dollars were leveraged to acquire commercial properties—the loans were packaged and sold as commercial mortgage-backed securities. At that time, loan originations were at record highs based on soaring property values coupled with low interest rates and brisk sales activity. Now, market reports show that there will be a surge of CMBS loan maturities within the next few years. Many of these have 10-year maturity terms with interest-only periods and were originated prior to the real estate meltdown. In 2005, 2006, and 2007, there were approximately $166.5 billion, $198.4 billion and 228.6 billion, respectively, in CMBS issuances, and volumes drastically reduced in 2008 to about $12.1 billion. In 2013, volumes recovered with about $86.1 billion in CMBS issuance reported. A significant number of CMBS loans securitized in the 2005 to 2007 time period will be maturing in 2015 to 2017.

GlobeSt.com: How will looming loan maturities affect financing for commercial properties today?

Hoffman: According to Real Capital Analytics, the more-than-$53-billion-out-of-$156-billion worth of securitized commercial mortgages set to mature in the next two years may face hurdles in refinancing. Again, securitized commercial mortgages typically have 10-year terms—many of the loans originated a decade ago that weren't subsequently terminated because of a resale or refinancing will soon come due. Of the $156 billion soon expected to mature, RCA reports that approximately one-third will need investors to add more money or will be worth less than the original loan.

What types of real estate and which areas of the country will be most impacted by CMBS maturities? 

Hoffman: Retail has suffered—largely due to shifting consumer behavior properties—and will be impacted the most, with properties potentially sold at discounted rates. A robust office market has helped borrowers—with more than 86% of office CMBS loans paid off without a loss. Loans in the Northeast and Mid-Atlantic boast real estate values above their 2007 peaks, so the outlook there is good. Yet nearly 60% of CMBS loans due in the Midwest and 55% in the Southeast will face some difficulties in refinancing, according to RCA. In these areas, property values are not as healthy.

GlobeSt.com: How will loan maturities impact investors, loan servicers and loan originators? 

Hoffman:Investors are hoping that there will be more properties to buy, those who service the loans hope there will be more work, loan buyers hope there will be more loans for sale, and loan originators are hoping to finance them. Of course, all of these sectors will be impacted by recent global events. The keynote economists at the conference, as well as top professionals within the CRE servicing, investing and lending industries, will help shed light on these issues.

GlobeSt.com: Will the Fed raise rates, and how will this impact CRE?

Hoffman:Everyone anticipates that the Fed will start raising interest rates—the question is not if but when—which will ultimately impact loans and the ability to cure matured/distressed loans. Much like the stock market, there remains the overriding fear that commercial real estate prices have been overinflated, especially in key markets—which goes back to interest rates, a topic certain to be up for discussion at the conference. Many experts point out that low interest rates may indeed be the reason for potentially bloated CRE prices.

GlobeSt.com: The recent stock-market correction can be attributed to global factors. Will it impact CRE on a domestic level?

Hoffman: Of course, the sharp decline of the markets—in the U.S. and globally—will affect commercial real estate values. Yet no one is certain exactly howorwhenthe recent economic events will impact commercial real estate properties/investors and lenders. Although the U.S. economy is relatively healthy, it is not immune to global factors, such as the Chinese economic meltdown, falling oil prices and slowing emerging economies. And the stock-market correction has created even more uncertainty about the markets' ability to successfully buy and finance the properties that are the collateral for CRE loans. World events and economies are evolving rapidly and are sure to impact the lending and CRE markets, providing plenty of fodder for lively discussion at the Lender Conference.