Why Is 2026 a Critical Year for Aurora Commercial Refinancing?
The commercial real estate refinancing landscape in Aurora is being shaped by an unprecedented convergence of factors that make 2026 one of the most important refinancing years in the market's history. An estimated $936 billion in commercial mortgages are maturing nationwide, the largest refinancing wave ever recorded, and Aurora properties represent a meaningful portion of the Denver metro's share of this maturity wall.
Many Aurora commercial loans maturing in 2026 were originated in 2021 and 2022 during the historically low interest rate environment. Borrowers who locked in rates of 3.5% to 4.5% now face refinancing at rates 200 to 400 basis points higher, creating significant payment increases and potential DSCR shortfalls. This rate gap is the central challenge facing Aurora commercial refinancing borrowers and the primary reason why early planning and lender selection are critical.
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The good news is that the refinancing environment has stabilized meaningfully. The federal funds rate has settled at approximately 3.64% as of late 2025. Colorado commercial mortgage rates start as low as 5.17%. Lending volume increased approximately 36% year-over-year through the third quarter of 2025, indicating that lenders are actively seeking refinancing business. These improving conditions create a window for Aurora borrowers to secure competitive refinancing terms.
For borrowers navigating this maturity wall, Clear House Lending connects Aurora property owners with a network of over 6,000 commercial lenders to find the most competitive refinancing rates and terms across all property types.
What Commercial Refinance Programs Are Available in Aurora?
Aurora's commercial refinancing market offers programs suited to every property type, investment strategy, and borrower profile. The optimal program depends on the property type, current occupancy and cash flow, the borrower's goals (rate-and-term vs. cash-out), and the desired loan structure.
Conventional Bank Refinancing is the most common approach for Aurora commercial properties. Banks offer rates between 5.5% and 7.0%, 5 to 10 year terms with 20 to 25 year amortization, and LTV up to 75%. Colorado banks including FirstBank, Vectra Bank, and Alpine Bank actively refinance Aurora commercial properties, as do regional and national banks with Denver metro lending teams. Bank refinancing works well for stabilized properties across all types with strong cash flow and borrower credit.
Agency Refinancing (Fannie Mae and Freddie Mac) provides the most competitive terms for multifamily properties with 5 or more units. Rates range from 5.5% to 6.75%, with terms of 5 to 12 years, LTV up to 80%, and non-recourse structure. Agency refinancing is the gold standard for Aurora apartment owners, particularly those near the Anschutz Medical Campus and in the established multifamily corridors of Southeast Aurora and City Center.
CMBS Refinancing offers non-recourse permanent financing for larger commercial properties valued at $2 million or more. Rates range from 5.8% to 7.5% with 5 to 10 year terms and LTV up to 75%. CMBS refinancing works well for Aurora industrial properties along the I-70 corridor, anchored retail centers, and larger office properties with creditworthy tenants.
SBA 504 Refinancing allows owner-occupants to refinance existing commercial mortgages with down payments as low as 10% of the property value. The SBA refinance program offers rates between 5.75% and 6.75% with terms up to 25 years. Aurora business owners who acquired properties at higher rates can use SBA refinancing to reduce their monthly payments and potentially extract equity for business purposes.
DSCR Refinancing qualifies borrowers based on property cash flow rather than personal income documentation. Rates range from 7.0% to 9.5% with LTV up to 75% to 80% and terms of 5 to 30 years. DSCR refinancing is ideal for Aurora investors with complex income situations or large portfolios who want simplified qualification.
Bridge Refinancing provides short-term capital for borrowers facing imminent loan maturities whose properties do not currently qualify for permanent refinancing. Rates range from 8.0% to 12.0% with 12 to 36 month terms. Bridge refinancing buys time for Aurora borrowers to stabilize occupancy, improve cash flow, or wait for more favorable permanent market conditions.
Use the commercial mortgage calculator to compare your current loan payments against potential refinance scenarios.
What Types of Refinancing Are Available for Aurora Properties?
Aurora commercial property owners have several refinancing structures available, each suited to different financial objectives.
Rate-and-Term Refinancing is the most straightforward approach, replacing the existing loan with a new loan at current market rates without extracting additional equity. This is the most common refinance type for Aurora borrowers whose existing loans are approaching maturity. Rate-and-term refinancing offers the best rates and highest LTV because the lender's risk is lower without the additional leverage of cash-out proceeds.
Cash-Out Refinancing allows Aurora property owners to borrow against their property's current appraised value and receive cash proceeds above and beyond the existing loan payoff. Most lenders allow cash-out up to 70% to 75% LTV, depending on the property type and the borrower's DSCR after the higher loan amount. Cash-out proceeds can be used for renovations, portfolio expansion, business purposes, or any other use. Aurora properties that have appreciated significantly, particularly industrial assets along the I-70 corridor and properties near the Anschutz Medical Campus, offer the strongest cash-out potential.
Portfolio Consolidation Refinancing combines multiple Aurora properties into a single blanket loan, simplifying management, reducing per-property closing costs, and potentially achieving volume rate discounts. This approach works well for investors with 3 or more Aurora properties who want unified loan administration. The tradeoff is cross-collateralization, where all properties secure the single loan, which can create complexity if the borrower wants to sell individual properties.
How Do Current Aurora Refinance Rates Compare by Property Type?
Refinance rates in Aurora vary significantly by property type, reflecting lender risk assessments and market conditions for each sector.
Multifamily properties command the most competitive refinancing rates at 5.5% to 7.0%, reflecting the sector's strong institutional demand, multiple available lending platforms (agency, bank, CMBS), and the stability of rental income. Aurora multifamily properties near the Anschutz campus receive the best terms due to the reliable demand from healthcare workers. LTV up to 80% is available through agency programs.
Industrial properties along the I-70 corridor also receive favorable refinancing terms at 5.5% to 7.0%, reflecting the sector's strong fundamentals including DIA proximity, e-commerce-driven demand, and stable NNN lease structures. CMBS and bank refinancing programs compete for Aurora industrial loans, driving rate compression.
Medical office properties near the Fitzsimons campus receive rates of 5.5% to 7.0%, benefiting from the healthcare sector's recession resistance and the institutional demand base of the Anschutz campus.
Anchored retail properties refinance at 5.8% to 7.5%, with grocery-anchored and NNN properties receiving the best terms. Properties in the Southlands trade area and established neighborhood centers with strong tenant mixes qualify for competitive financing.
Mixed-use properties refinance at 6.0% to 7.5%, with rates varying based on the component mix and the relative strength of each use type.
General office properties face the widest rate range at 6.5% to 8.0% and the most conservative LTV at 60% to 65%. Medical office near Fitzsimons is the exception, receiving significantly better terms than general suburban office.
Borrowers should use the DSCR calculator to model how their property's cash flow coverage changes under different refinancing scenarios.
What Is the $936 Billion Maturity Wall and How Does It Affect Aurora?
The maturity wall refers to the unprecedented volume of commercial mortgages reaching their maturity dates in 2026, creating a refinancing wave that affects commercial property owners across every market, including Aurora.
For Aurora property owners, the maturity wall creates several specific challenges and opportunities. Borrowers with appreciated properties and strong cash flows are well-positioned to refinance, particularly owners of industrial properties along the I-70 corridor and multifamily properties near the Anschutz campus where values have increased. These borrowers may even extract cash-out equity while refinancing at competitive terms.
Borrowers facing equity gaps need creative solutions. If a property's value has declined below the existing loan balance, or if the higher interest rate reduces the DSCR below the new lender's minimum requirement, the borrower may need to inject additional equity, bring in a partner, negotiate a loan modification with the existing lender, or use bridge financing as a temporary solution.
Borrowers with prepayment penalties on existing loans must weigh the cost of early refinancing against the risk of waiting until the penalty expires. Yield maintenance and defeasance penalties on CMBS loans can cost 5% to 15% of the loan balance or more, making early refinancing prohibitively expensive in many cases. Borrowers should analyze the net benefit of refinancing after penalty costs versus waiting for the open period.
The maturity wall also creates acquisition opportunities for Aurora investors with available capital. Properties whose owners cannot successfully refinance may be sold under pressure, creating below-market acquisition opportunities for well-capitalized buyers.
How Should Aurora Borrowers Prepare for Refinancing?
Successful commercial refinancing in Aurora requires advance preparation that begins 12 to 18 months before loan maturity.
Step 1: Analyze your current loan. Review the maturity date, prepayment penalty structure, outstanding balance, and current terms. Determine whether prepayment penalties will apply if you refinance before the scheduled maturity. Identify any upcoming open periods where the penalty expires.
Step 2: Evaluate your property's current market position. Obtain a broker opinion of value (BOV) or preliminary appraisal to understand your property's current value relative to the outstanding loan balance. Review your rent roll, occupancy, and trailing 12-month operating statements to assess current NOI and DSCR.
Step 3: Identify and address deficiencies. If your property's occupancy has declined, cash flow has weakened, or deferred maintenance has accumulated, you have time to address these issues before the refinance. Increasing occupancy, raising rents, reducing expenses, and completing deferred maintenance can meaningfully improve your refinancing position.
Step 4: Engage a lending advisor. Clear House Lending helps Aurora borrowers identify the optimal refinancing program from our network of over 6,000 commercial lenders. Starting the process early allows time to compare multiple lender options and negotiate the best terms.
Step 5: Prepare documentation. Lenders require updated rent rolls, trailing 12-month operating statements, property tax records, insurance documentation, tenant lease copies, borrower financial statements, and entity documentation. Having these documents organized and current accelerates the underwriting process.
What Are the Costs of Refinancing an Aurora Commercial Property?
Refinancing costs must be weighed against the benefits of improved terms, and Aurora borrowers should budget for several expense categories.
Origination fees range from 0.5% to 1.5% of the new loan amount, depending on the lender and loan program. Some bank refinances charge no origination fee for existing customers.
Appraisal costs range from $3,000 to $8,000 depending on the property type and complexity. Mixed-use and larger properties require more expensive appraisals with multiple valuation approaches.
Environmental assessments (Phase I ESA) cost $2,500 to $5,000 and are required for most commercial refinances. If the property had a Phase I within the past year, some lenders may accept an update rather than a new report.
Legal and title costs range from $5,000 to $15,000 for attorney review, title insurance, and recording fees. CMBS and larger loans typically carry higher legal costs due to more complex documentation.
Prepayment penalties on the existing loan are often the largest refinancing cost. Step-down penalties typically range from 1% to 5% of the outstanding balance. Yield maintenance penalties on CMBS loans can be significantly higher and are calculated based on the difference between the existing loan rate and current treasury rates.
The total refinancing cost, excluding prepayment penalties, typically ranges from 1.5% to 3.5% of the new loan amount. Borrowers should calculate the breakeven point: the number of months it takes for the monthly payment savings from the new loan to offset the closing costs. For most Aurora refinances, the breakeven point falls between 12 and 24 months.
What Cash-Out Opportunities Exist for Aurora Property Owners?
Cash-out refinancing allows Aurora property owners to extract equity from appreciated assets and redeploy that capital into new investments, renovations, or business purposes.
Industrial properties along the I-70 corridor have experienced the strongest appreciation in Aurora over the past three years, with values increasing approximately 15% to 25% driven by e-commerce demand and DIA proximity. These properties offer the most substantial cash-out potential, with lenders providing cash-out up to 70% to 75% LTV.
Multifamily properties near the Fitzsimons campus have appreciated 10% to 20% as the Anschutz Medical Campus expands and housing demand strengthens. Agency programs allow cash-out up to 70% to 75% LTV for stabilized apartment properties.
Medical office properties near Fitzsimons have seen similar appreciation driven by the healthcare sector's expansion. Cash-out up to 65% to 70% LTV is typically available through bank and life company programs.
Retail properties in the Southlands trade area have appreciated 5% to 15%, with grocery-anchored and NNN properties showing the strongest gains. Cash-out LTV of 65% to 70% is available for well-tenanted retail.
The key constraint on cash-out refinancing is maintaining adequate DSCR after the higher loan amount. The property must generate sufficient NOI to cover the increased debt service at a ratio of 1.20x to 1.35x depending on the property type and loan program. Borrowers should model the cash-out amount against the property's current and projected NOI to ensure the refinanced loan remains sustainable.
Contact Clear House Lending to analyze your Aurora property's cash-out refinancing potential.
What Are Common Prepayment Penalty Structures on Aurora Commercial Loans?
Understanding prepayment penalty structures is essential for timing your Aurora refinance optimally.
Yield Maintenance compensates the lender for the interest income lost when a loan is repaid early. The penalty is calculated as the present value of the difference between the existing loan rate and current treasury rates over the remaining loan term. Yield maintenance penalties are common in CMBS and life insurance company loans and can be substantial, often 5% to 15% of the loan balance or more.
Defeasance requires the borrower to purchase a portfolio of government securities that replicate the remaining loan payments, effectively replacing the loan collateral. This structure is common in CMBS loans and can be complex and expensive to execute. Defeasance costs depend on current bond prices relative to the loan terms.
Step-Down Penalties decline over the loan term, typically following a 5-4-3-2-1 or 3-2-1 pattern expressed as a percentage of the outstanding balance. A 5-year step-down starting at 5% means the penalty in year one is 5%, year two is 4%, and so on until year five when it drops to 1%. This structure is common in bank and DSCR loans.
Flat Fee Penalties charge a fixed percentage (typically 1% to 3%) regardless of when the loan is prepaid. Some loans have a flat fee that expires after a set period.
Open Periods allow penalty-free prepayment during the final months of the loan term, typically the last 3 to 6 months. Most commercial loans include some open period before maturity.
Aurora borrowers should request detailed prepayment penalty calculations from their current lender before committing to a refinance. In some cases, waiting for the open period or a step-down reduction can save tens of thousands of dollars in penalties.
Frequently Asked Questions About Aurora Commercial Refinancing
When should I start the refinancing process for my Aurora property?
Begin the refinancing process 12 to 18 months before your loan maturity date. This timeline allows you to evaluate your property's market position, address any deficiencies (vacancy, deferred maintenance, cash flow), compare multiple lender options, and complete the underwriting and closing process without time pressure. Starting early also provides a cushion if the first lender application does not result in satisfactory terms.
Can I refinance an Aurora commercial property with a current vacancy problem?
Yes, though your options may be limited. Properties with vacancy above 10% to 15% typically do not qualify for competitive permanent financing and may need bridge refinancing at higher rates (8% to 12%) to provide time for lease-up. Bridge loans offer 12 to 36 month terms that give you a runway to stabilize occupancy and then refinance into permanent debt. Some banks will refinance properties with moderate vacancy if the borrower demonstrates a credible leasing plan and provides additional collateral or reserves.
What DSCR do I need to refinance an Aurora commercial property?
DSCR requirements for Aurora refinancing range from 1.20x to 1.35x depending on the property type and loan program. Multifamily properties refinancing through agency programs need 1.20x to 1.25x. Industrial and retail properties typically need 1.25x to 1.30x. Office properties face the highest DSCR requirements at 1.30x to 1.50x reflecting elevated vacancy risk. SBA refinances evaluate the business's total cash flow rather than property-only DSCR.
Can I consolidate multiple Aurora properties into one refinance loan?
Yes. Portfolio or blanket refinance loans consolidate multiple Aurora properties under a single mortgage. This approach simplifies administration, reduces per-property closing costs, and may achieve volume rate discounts. The tradeoff is cross-collateralization, meaning all properties secure the single loan. Banks and some DSCR lenders offer portfolio refinancing programs. Properties should ideally be similar in type and quality to avoid weaker properties dragging down the underwriting of stronger ones.
How much does it cost to refinance an Aurora commercial property?
Total refinancing costs, excluding prepayment penalties on the existing loan, typically range from 1.5% to 3.5% of the new loan amount. This includes origination fees (0.5% to 1.5%), appraisal ($3,000 to $8,000), environmental assessment ($2,500 to $5,000), legal and title fees ($5,000 to $15,000), and miscellaneous costs. Prepayment penalties on the existing loan can add significantly to the total cost, particularly for CMBS loans with yield maintenance or defeasance requirements.
Is it worth refinancing if my current rate is lower than today's market rates?
In most cases, no, if the only goal is rate improvement. However, refinancing may still make sense if your loan is approaching maturity (you will need to refinance regardless), if you want to extract cash-out equity for investment purposes, if you want to change loan structure (recourse to non-recourse, shorter to longer term), or if your current lender is unwilling to extend or modify. The decision should be based on a comprehensive cost-benefit analysis that accounts for the rate differential, closing costs, prepayment penalties, and the value of any cash-out proceeds or structural improvements.
Positioning Your Aurora Refinance for Success
The 2026 maturity wall creates both urgency and opportunity for Aurora commercial property owners. Borrowers who plan ahead, prepare their properties for refinancing, and work with experienced lending advisors can secure competitive terms that support their long-term investment objectives. Those who delay may face limited options and time pressure that result in less favorable outcomes.
Whether you are refinancing a stabilized multifamily property through agency programs, extracting cash-out equity from an appreciated industrial asset, consolidating a portfolio of Aurora rental properties, or using bridge financing to navigate a maturity deadline, the right refinancing strategy depends on your specific property, financial situation, and investment goals.
Contact Clear House Lending today to start your Aurora commercial refinancing analysis and get matched with the right lender from our network of over 6,000 commercial lending sources.