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Apartment Distress Increases 185% Year to Date
The distress rate on apartment loans with CMBS financing has increased 185% year to date, according to CRED iQ. Loans in the multifamily sector began 2024 with a 2.6% distress rate—a composite of the special servicing and delinquency rates—and now stand at 7.4%.
Although the monthly increase between May and June was a modest three basis points, apartment loans are now vying with those in lodging sector for third place, CRED iQ reported.
The retail and office sectors are nearly neck-and-neck for the highest distress rates, notching 11.7% and 11.5%, respectively. Both sectors saw modest increases of four bps compared to the previous month.
Hotels retained third place with an 8.1% distress rate, after logging the best month-over-month improvement of the group, with a 130-bp decline in distress. Industrial and self-storage continued operating at sub-1% in all but one of the past 7 months.
The overall CRED iQ distress rate added 13 bps in June to 8.62%, nearly identical to May’s increase. The June rate a fourth straight record high. CRED iQ’s special servicing rate remained mostly flat at 8.08% while the CRED iQ delinquency rate gained 48 basis points to 6.28%.
- ◦Financing
