Dive Brief:
- Multifamily’s distress rate inched up 10 basis points to 13% in February, according to a report from data firm Cred iQ. In January, it had risen 40 points. Apartments rank as the second most distressed asset type behind offices.
- Multifamily commercial mortgage-backed loan delinquencies for apartments decreased 16 bps to 4.46%, according to a report from data firm Trepp. A year ago, the rate was 1.81%.
- February marked a month of noticeable improvement in distress across commercial real estate. The CRED iQ overall rate fell by 70 bps to 10.8%, which broke a monthly streak of four record highs.
Dive Insight:
CRED iQ’s CRE delinquency rate fell from 8.9% in January to 8.0%, and the special serving rate declined 20 points to 10.1%. One year ago, the firm’s delinquency and special servicing rates were 5.4% and 7.0%, respectively.
Trepp’s overall delinquency rate for CRE fell for the second straight month, decreasing 26 bps to 6.30%. In January, it declined by 1 bps to 6.56%, ending a streak of six straight months of increases.
As multifamily distress numbers tick up slowly from month to month, some managers are seeing more assignments of troubled communities from banks.
“The last three assets that we took over, whether it was through purchase or management, were all distressed,” Melanie French, CEO of Dallas-based property management firm RR Living, told Multifamily Dive.
French says she’s seeing an increasing number of apartment communities that are having trouble. “Owners have gotten themselves into trouble,” she said. “We’re seeing more of that.”
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