Trepp, Inc.’s Post

The Bronx is drowning! The Bronx and upper Manhattan are underwater on their rent stabilized multifamily loans. These markets contain very high percentages of 100% rent stabilized properties and have experienced the greatest tightening of spreads between the sales price per square foot and the existing debt balance per square foot. Without any equity value for an owner to recoup, nor an ability to meaningfully raise rents, one can assume that most landlords will not make the necessary capital improvements that are sorely needed to maintain satisfactory living standards for tenants. Lenders will get caught holding the bag, whether they infuse the capital themselves, or reduce their loan balances to provide the existing owners with a financial incentive to perform adequate maintenance. While these properties have been renovated over time and many have strong old bones, they’re still about 100 years old! Things fall apart… We can’t expect landlords and lenders to keep holding their breath. They’ve got to come up for some air soon, or we’ll start to see some pretty dire outcomes. Dive deeper into Maverick’s underwater analysis in our latest white paper: insights.maverickrep.com #banking #rentstabilization #bronx #multifamily

I see quite a few multifamily deals on a weekly basis, and what I am seeing, interest rates are lowering the loan amounts. The lower loans are normally due to DSCR issues, because of higher rates. This article I think shows the softening in the overall commercial real estate, including multifamily. #multifamilyrealestate #affordablehousing

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Why Multifamily? 1. Economies of Scale: Multifamily properties have multiple units under one roof, which means you can spread your fixed costs across multiple units. This results in more efficient property management and lower per-unit operating costs compared to managing several separate single-family homes. It can lead to increased cash flow and reduced risk because a single vacancy has a smaller impact on your overall income. 2. Diversification & Risk Mitigation: Multifamily properties provide diversification by having multiple tenants and rental agreements. This diversification can help reduce risk, as the negative impact of a single tenant's non-payment or vacancy is diluted across multiple units. In contrast, single-family investments are often more concentrated, and the loss of a single tenant can have a more significant financial impact. 3. Financing & Cash Flow: Multifamily properties are typically easier to finance with commercial loans, which often offer more favorable terms and lower interest rates compared to residential mortgages. Suppose you are ready to know more about the next deal. Get in touch with us. https://lnkd.in/dMkN6XKn #multifamilyinvestingopportunities #realestateinvesting #propertyinvestment #realestatestrategy #crownbaygroup #investwisely #realestatewealth #investinginapartments #financialgrowth #multifamilyadvantages #realestateinsights

Manus Clancy, Trepp, Inc. Senior Managing Director was interviewed by Curbed Magazine on the wall of commercial property debt maturing and what it actually means for building owners and their renters. "To make sense of how landlords got here and what might happen next, we talked to Manus Clancy, to find out what’s going on." "There are three things happening all at once. Interest rates are considerably higher now than in early 2022. That means property values have fallen and borrowers/landlords are learning that their property is not generating enough cash to qualify for a loan that will retire the existing debt. Certain property types have become toxic, particularly offices..." See the piece: https://hubs.li/Q026N3mt0 #Trepp #CommercialRealEstate #CMBS #CRE #Curbed

CRE MID YEAR UPDATE WHAT TO BE AWARE OF LOAN RESTRUCTURING Lenders and borrowers are extending loan terms to avoid foreclosures and waiting for market conditions to improve, which helps maintain stability in the CRE market. This strategy defers risks and costs, allowing both parties to avoid immediate losses and prevent market flooding with distressed assets (Texas Real Estate Research Center, HousingWire). DISTRESSED LOANS OVER ESTIMATED Despite fears, the distribution of CRE loans across many banks and fewer office loans maturing in 2024 suggest the CRE market won't collapse the banking system. Distressed properties are expected to appear gradually over the next 24 to 36 months, allowing the market to absorb them without overwhelming the financial system (HousingWire, Texas Real Estate Research Center). DIVERSIFYING CORE ASSETS Investors are increasingly looking to other sector real estate alternatives to stabilize portfolios as office building cashflows decline. This shift requires rethinking core assets and diversifying investments to include property types that are resilient to current market dynamics (Texas Real Estate Research Center). PROPERTY MANAGEMENT OVERHAUL In response to expanding cap rates and price declines, CRE owners are emphasizing traditional management, client service and concessions to attract and retain tenants, better positioning investment-grade buildings for growth. Landlords are you ready for the next cycle? --- Put our team to work for you ....contact me for Questions about Commercial Real Estate in the Southern California Inland Market Nathan Bragg, Managing Director Commercial Division - RE/MAX TIME Realty RE/MAX Top 100 Commercial Brokers U.S. RE/MAX Lifetime Achievement Award RE/MAX Hall of Fame Award Industrial | Commercial Investment Real Estate Direct: 909-210-3175   Email:  nathanbragg@remax.net CAL BRE BROKER LIC # 01340519 Web: https://rem.ax/CRE_Experts #remax #remaxcommercial #socalrealestate #realestate #remaxtime #inlandempire #cre #commercial #industrialwarehouse #commercialrealestate #investmentrealestate #remaxllc #remaxlosangeles #sba #remaxhustle #creinland #commercialrealestateinland

Interesting article outlining some of the headwinds in Multi-Family Real Estate given interest rates and loans maturing. The partners I'm speaking with confirm these challenges and experienced the impacts from more restrictive financing. This was acute for them over the last 6 months, but they are also planning and managing it well in the short to medium term. They're also reporting signs of sunnier times in the second half of 2024. Regardless, a softening rental market in Multi-Family isn't a bad thing. https://lnkd.in/g4KV5RZz

Commercial Real Estate Outlook for 2024 Contact me to discuss the latest scoop in real estate! #Homedeals #assumableloans #realestate #realtor #dreamhomes #homebuyers #realestateagent #homesearch #realestateinvesting #housingmarket

It appears that Developer Rishi Kapoor and his wife, Jennie Frank, are facing significant financial troubles, potentially leading to the foreclosure of their waterfront Cocoplum estate in Coral Gables. They are being sued by an entity managed by private lender Robert Gutlohn, who claims that Kapoor and Frank owe $4.6 million in principal and interest on a loan they took out in 2021 to finance their $5.9 million home purchase and renovations. Click on the article to know more: #RishiKapoor #realestate #realestateinvestment

Great snapshot on the SHADOW INVENTORY of #distresseddebt working through the system via #loansales. Note that most of the #officeapocalypse assets have yet to receive a Notice of Default. CRAZY, right? Here's the rundown: Fortress Co-CEO Drew McKnight says -defaults limited due to temporary loan extensions -values have not bottomed out yet -distress as at “the top of the first inning” -long, long road ahead for commercial real estate -already acquired $1.5 billion of performing office loans -PRICING BETWEEN 50 and 69 CENTS ON THE DOLLAR -Jamestown acquired the 40,000 SF office/retail building, fully occupied, for $40.4 million, or $1,000 per square foot, in 2018 -$22.2 million loan @ 660 Market Street, in the Financial District, the San Francisco doesn't mature until December 2025 -Fortress acquired the loan from Jamestown for an undisclosed price (likely 50 to 69 cents to par) -Trophy assets in core markets are being cleared off the balance sheet at 30% - 50% discounts with no clear bottom in site Interest rates have yet to come in. Furthermore, compression in cap rates and IRRs for value-add office assets are unlikely with 25 - 50 bps changes in FED policy, especially for Class B & C assets located in secondary and tertiary markets. https://lnkd.in/g7BmHYwh