More than $2.4B in multifamily mortgage loans are now in some form of distress. It’s a new high, exceeding the volume of non-performing MF loans seen at the end of 2020.
Dive into BankProspector to find out which banks are holding the most of these non-performing debts.
Total non-performing loans in the multifamily debt space spiked again in Q3. This pool has been increasing all year. It is now higher than what some may have believed to have been a plateau after the year of COVID lockdowns ravaged the US. There are now half a billion dollars more in distressed multifamily loans on banks’ books than in the first quarter of this year.
Loans in the 90 day plus late and still accruing stage almost doubled between the second and third quarter of 2021.
Additionally, around a quarter of a billion dollars in newly defaulting, 30 to 89 day late loans have been added to the pool of non-performers, making up close to half of all delinquent and failed loans.
Around $1.3B in loans remain in the non-accrual stage.
The amount of multifamily REOs has steadily declined this year, now down to around just $50M, from $61.2M in Q2.
New record sales volume in CRE has been heavily supported by apartment buildings, of which these REOs have certainly played a role, even if it has been a small one.
After a false sign that the performance of this sector may be improving at the beginning of the year, defaults have rebounded and compounded. Both new defaults and loans continuing to fail to be cured appear to keep on rising.
This could be an indicator that landlords are finally running out of money. However, others may likely be throwing in the towel. Or some may be finding it isn’t as easy to refinance as they expected.
While the rules are a mess and very diverse among different jurisdictions, evictions are flowing again. At the same time, rents are rising fast, and demand for performing income property investments from both domestic institutional investors and foreign investors is strong.
Surging demand for rentals along with rental rate increases often exceeding 40% year over year are creating an incredible sweet spot in the market for those that can take these ailing properties to performing again.
Log in now to see which banks are holding the most distressed multifamily loan notes…