Refinance when one of six triggers is active: (1) open prepay window approaches; (2) business-plan execution is complete and the property is stabilized; (3) partner buyout requires liquidity; (4) cash-out at materially improved value; (5) change in capital structure (sub-debt addition or removal); or (6) maturity within 12 months.
How to evaluate each trigger
Open prepay window approach: most institutional perm loans have a 90- to 180-day open window at the back end during which prepayment is allowed without penalty. Start the bake-off 90 to 120 days before the open window begins so the new loan can fund inside the window or shortly after.
Partner buyout: refi to provide liquidity for a partner buyout, with the recovered equity funded by the new loan proceeds. Lender scrutiny is higher for partner buyouts because the borrower's position changes; expect to document the buyout terms and provide updated key-principal information.
Cash-out at improved value: when the property has appreciated materially (rent growth, cap-rate compression, completed cap-ex) and the borrower wants to recover equity. Cash-out is treated more conservatively than rate-and-term, agency requires 12-month seasoning; some lenders require documented use of proceeds.
Maturity within 12 months: do not wait until the last 90 days. Start the bake-off 6 to 9 months before maturity to allow time for diligence, document negotiation, and execution. A maturity miss can be a default. A CMBS maturity default goes to the special servicer. An agency maturity goes to the DUS or Optigo servicer and Fannie Mae or Freddie Mac. A bank or life-company maturity is worked out with that lender.
Sources
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Commercial/Multifamily Mortgage Maturities Outlook · Mortgage Bankers Association · 2026-02