Multifamily drives increase in CRE servicing, delinquency rates
Trepp wasn’t alone in pointing out problems in multifamily loans in July. Apartment and office delinquencies drove a 6-bps increase in CRE delinquencies, according to a report from Fitch Ratings.
While CMBS loans are a problem spot for multifamily, lenders across the debt universe are beginning to take a harder look at the troubled apartment properties on their books in 2025, according to industry sources.
“I think those conversations are being had,” said Kyle Draeger, executive managing director of multifamily debt and structured finance at Dallas-based CBRE Capital Markets. “Maybe you’ve exercised two or three [loan] extensions, and the debt funds or banks are saying, ‘You’ve done enough. Let’s see if you can sell or refinance at this point.’”
Draeger has also seen a fair amount of borrowers put cash in as they’ve refinanced their loans.
“There’s definitely been that capability of the equity markets to fund a little bit more equity to get off of a bridge loan and into a permanent loan,” Draeger said.
Despite this increase in lender activity, Draeger wouldn’t characterize these problem loans as distressed. “I would use the word ‘stress,’” he said. “There are a lot of stressed properties.”