402. Your Loan Matures in 18 Months. Now What?

Key TakeawaysStart planning for your loan maturity 18 months out. That gives you enough time to evaluate your options, negotiate with lenders, and strengthen the property before you’re under pressure.Your loan term is not your amortization. A commercial loan might amortize over 20–25 years but still balloon after five years, leaving a significant balance to refinance.DSCR is one of the most important numbers in a refinance. Your payment history helps, but the property still needs enough NOI to support the new debt at today’s rates.Higher interest rates can completely change the refinance. Even if your loan balance has decreased, a higher rate can significantly increase debt service and create an NOI gap.Refinancing shouldn’t be your only option. Run multiple strategies in parallel: competing lenders, bringing in partner capital, recapitalizing, extending or modifying the existing loan, or potentially selling all or part of the property.You can actively improve your refinance position. Increasing rents, filling vacancies, signing leases, and reducing operating expenses can increase NOI and help the property meet the lender’s requirements.Work backward from maturity. Review your loan documents 24 months out, model the refinance and NOI gap at 18 months, improve operations and contact lenders around 12 months, choose your path by six months, and aim to be executing—not deciding—by 90 days out.