Banks reported another surge of multifamily loan defaults in Q4 2023. Not only did newly late loan volume double, but another $300M in already late loans were moved to the non-accrual stage at the end of the year as well.
Dive into the BankProspector dashboard to find out which banks are holding the most non-performing notes now.
Multifamily
Year end reports from US banks showed a dramatic rise in non-performing multifamily loans as we rolled into 2024, a trend we’ve been seeing since Q3 2022.
It’s a pattern that seems to be spreading across more institutions, with 259 banks reporting that they held non-accrual stage multifamily mortgage loans in Q4.
More loans appear to be going the distance to the non-accrual stage, with several hundred million more added, after soaring by almost $4B in the third quarter.
Multifamily REO
Although banks do not seem to be successful in heading off defaults before this stage, with only $43M in multifamily REO, the demand for these non-performing real estate assets still appears to be there. Or other investors have been successful in acquiring these delinquent loans, and turning them around.
Looking Ahead
Multifamily debt and income properties are still highly desired by sophisticated investors and funds. Perhaps even more so today given the outlook for other areas of the economy and other asset classes.
Still, tenants are under increasing financial distress, with inflation set to soar again in 2024. This along with maturing multifamily loans in a high rate environment is likely to create more defaults.
Log in now to see which banks are holding the most distressed multifamily loan notes…
