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Multifamily Distress Posts 80-bp Increase
Amid an overall four-basis-point decline in CRED iQ’s distress rate, multifamily posted an 80-bp increase in February, the analytics firm reported. It was the largest monthly increase in that sector in more than 18 months.
As an example of issues that CRED iQ is tracking within the apartment sector, the firm cited a $94.1-million loan backed by The Reserve at Brandon, a 982-unit multifamily property in the Tampa suburb of Brandon, FL. The loan fell 30 days delinquent in February.
“The loan’s rate cap expiration date was in April 2024, along with its initial maturity date,” according to CRED iQ. “There were three 12-month extension options at securitization. The loan was added to the watchlist in May 2023 due to low occupancy and DSCR – mostly recently reported in September at 82.3% and 0.41, respectively.
“At underwriting, the as-is appraisal for the multifamily community was $232.5M ($263,762/unit) with an as-stabilized value of $312.6 million, with stabilization anticipated for March 2025. Servicer commentary indicates there are discussions of extending the April 2024 maturity date.”
CRED iQ attributed February’s decrease in the overall distress rate primarily to a $2.1-billion loan backed by a self-storage portfolio becoming current after being delinquent the previous month. Office continues to see the highest distress rate at 11.0%.
Pictured: The Reserve at Brandon. Photo courtesy of Cushman & Wakefield.
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