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Apartment Investors Face $757B of Loan Maturities
In a rising interest rate environment, apartment owners face $757 billion of loans coming due between 2026 and 2028, the Wall Street Journal reported, citing Mortgage Bankers Association data. Nearly $300 billion of these loans mature in 2026 alone, at borrowing rates that are roughly twice the level of 2021, when many of the loans were made.
Five years ago, the multifamily sector was seen as a refuge for investors as other property types struggled to recover from the pandemic, reported the WSJ. Borrowing rates hovered around 3%, and rents posted double-digit gains in many cities. “There was a sense of relative euphoria,” Mike Wolfson, Newmark’s managing director for multifamily capital markets research, told the WSJ. “But things turned very quickly.”
The delinquency rate for multifamily loans in CMBS jumped from 1% in October 2023 to 7.1% this year, the biggest increase of any major property type, the WSJ reported, citing a Morgan Stanley report. About 3% of the loans coming due this year that can’t be extended are in some kind of distress, the highest level over the past five years, according to Trepp.
- ◦Financing
