In 2025, an estimated $600 billion in commercial real estate loans are scheduled to mature. While the interest rate environment has stabilized somewhat over the past year, rates have not fallen as far as borrowers had hoped, and expenses, particularly insurance, continue to increase exponentially. Given the foregoing, it is likely that a non-negligible percentage of borrowers may not be able to refinance commercial real estate loans on or before their maturity dates.

Virtually all commercial real estate loan documents contain a provision providing that if a payment is not timely, a late fee is imposed in connection with that late payment—typically 5% of the amount of the payment that was due. A 5% late fee imposed on a delinquent monthly installment payment does not usually cause much controversy.