Latest news with #Trepp
Yahoo
14-05-2025
- Business
- Yahoo
CMBS delinquencies for apartments reach highest point since 2015
This story was originally published on Multifamily Dive. To receive daily news and insights, subscribe to our free daily Multifamily Dive newsletter. Multifamily commercial mortgage-backed securities loan delinquencies for apartments jumped 113 basis points to 6.57% in April, according to a report from Trepp. The data firm's servicing rate increased 28 bps to 8.59%. A year ago, the delinquency rate for apartments was 1.33% — meaning it has risen 524 basis points over the past 12 months. The CMBS delinquency rate for apartments has reached its highest point since March 2015, when it was 8.28%, according to Trepp. Increases in the lodging sector delinquency rate, which saw a 66 bps rise to 7.85%, and the multifamily rate pushed overall commercial real estate distress 38 bps to 7.03%. The CRE delinquent balance was $41.9 billion, compared with $39.3 billion in March. Despite the rise in delinquencies, other indicators show commercial distress falling. CRED iQ's distress rate, which captures loans 30 or more days delinquent and those in special servicing, fell by 30 basis points to 10.3% in April. 'This marks the third straight month of declines, signaling potential relief in the CRE sector after a period of heightened volatility,' CRED iQ's report said. However, CRED iQ's delinquency rate inched up from 7.9% to 8.0%, and the special servicing rate rose 20 basis points to 9.9%. CRED iQ analyzed the $52.9 billion in distressed CRE CMBS loans and found that 15.7% remain current and 25.7% are delinquent. Another 58.6% have passed their maturity date: 16.6% are performing (down from 20.0%), while 42.0% are non-performing (up from 36.3%). 'This shift in matured loans underscores the challenges borrowers face in refinancing or resolving loans in a high-interest-rate environment, a trend that could impact CMBS portfolio performance if it persists,' CRED iQ wrote. While the delinquency and servicing numbers may be increasing, apartment buyers still aren't seeing waves of distressed properties hitting the market. 'There haven't been a lot of forced transactions,' Dan Dooley, chief investment officer for Columbus, Ohio-based real estate investment manager Coastal Ridge, told Multifamily Dive. 'But as this has rolled on, capital has a timer on it, and funds come to an end. It really felt like we were starting to get to the point where we were going to see a lot more transactional activity in 2025.' Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Times
30-04-2025
- Business
- Business Times
Office loan trouble signal problems ahead for a US$650 billion bond market
[WASHINGTON] When three Seattle office buildings a short distance from headquarters defaulted on US$135 million worth of commercial mortgage debt last month, it left bond investors who financed the properties facing a long and uncertain slog to claw back money. The buildings, owned for years by developer Martin Selig, became the latest additions to a pile of soured business property loans that is now as large by some measures as it was during the pandemic. 'A lot of defaults during Covid are still not fully resolved, and loans that were modified or extended during the 2022 interest rate hikes are coming to roost,' said Karan Malhotra, head of structured credit trading at Monarch Alternative Capital. 'They need to be flushed out of the system, so we're likely to see re-defaulting and more loan sales.' Higher interest rates, which caused borrowing costs to rise and values to fall, are driving the current problems. The toxic mix is filtering through to a US$650 billion market where commercial real estate loans get packaged into bonds of varying size and risk. One in 10 of the mortgages inside these securities is bad enough that troubleshooters called special servicers now oversee them, double the rate from two years ago, according to real estate data company Trepp. Office buildings are the source of many of the problems, but with values still down 37 per cent from their peak and the market moribund there's no easy solution for the special servicers whose role is to maximize recoveries for bondholders. More trouble looms. The share of offices bundled into the securities that are seriously late on mortgage payments recently reached the highest since the aftermath of the financial crisis era at close to 10 per cent, according to data compiled by JPMorgan Chase. It's since dropped back slightly. Defaults and foreclosures are also on the rise. A NEWSLETTER FOR YOU Tuesday, 12 pm Property Insights Get an exclusive analysis of real estate and property news in Singapore and beyond. Sign Up Sign Up Concerns about economic stagflation or recession are adding to the headwinds. Some US$177 billion worth of securitised office loans have yet to reach their final payment dates and recent market volatility makes it less likely that borrowers will be able to refinance mortgages at maturity, said Bank of America strategist Alan Todd. 'The number one question I got on the road' recently was 'how do tariffs impact commercial real estate?' Todd said. 'The answer is nobody knows. But if you consider the higher odds of lower growth, more volatility and higher inflation, it's probably not good.' The three offices in Seattle exemplify the type of properties front and centre in the new crunch. The buildings lack the high-powered amenities that have become a draw for tenants, while the number of workers downtown during weekdays is still just 60 per cent of what it was in 2019 despite Amazon, a major occupier, ending its hybrid work policy earlier this year. Factors like this playing out across the USA have made it difficult for property owners like Selig to generate enough money to repay debt. Martin Selig Real Estate didn't respond to requests for comment. With some mortgages staying in special servicing for six years or longer, according to Todd, the potential hit from defaults takes time to filter through to the bondholders. One projection by JPMorgan strategists estimates future losses on office loans in CMBS that package multiple debts could approach 9 per cent of total value, twice the level expected for retail or lodging financings. 'It's loans on obsolete office buildings that are pushing delinquencies higher. It's far from clear if these will ever recover' the debt, said Lea Overby, a strategist at Barclays Plc. The prolonged workouts may have an impact for the broader economy. A 2024 paper by researchers at the Federal Reserve Bank of New York found that 'extend and pretend' tactics increases financial fragility and 'fuel a rising wave of impaired loans in the future.' For now, the tactic shows no signs of stopping. Amend and extends soared by nearly 100 per cent in the year to March 2025, reaching US$39.3 billion worth of mortgages, according to a recent post by data provider CREDiQ. That also makes it more difficult to bet against the distress. During the long decline of US shopping malls starting in the 2000s, short bets by Carl Icahn and others using CMBS derivatives delivered merely middling returns because borrowers on the hook for bad loans kept finding ways to extend the debt. Despite that history, some see an opportunity in the coming trouble. These investors argue that even if loans tied to a given set of properties are unaffordable – perhaps because they were underwritten at low interest rates – some of the buildings are high quality and in demand from occupiers. 'We're gearing up for the opportunity,' said Matt Weinstein, co-chief investment officer at structured credit and real estate investor Axonic Capital. 'As downgrades and new appraisals go through, there's going to be owners of loans and bonds that need to sell.' BLOOMBERG
Forbes
18-04-2025
- Business
- Forbes
How Macro Trends Impact Your Local Real Estate Market
The skyline of St. Paul, Minnesota. the capital and second-most populous city in Minnesota. ... More AFP PHOTO / KAREN BLEIER (Photo credit should read KAREN BLEIER/AFP via Getty Images) While knowing the neighborhood where you are investing is certainly an essential component to real estate success, following macro trends can give you a competitive advantage. You may be able to better understand how your local market could be impacted. In a recent podcast, I spoke with Lonnie Hendry, Chief Product Officer at Trepp and host of The TreppWire Podcast, a weekly show which offers insights on commercial real estate, structured finance, and banking news and trends. Lonnie shared the value of keeping the big picture in mind as you operate in your local market. Most recently, the impacts of new tariffs have hit the headlines; as important as it is to account for their effect in your investing decision-making, sometimes tariffs fall into the category of waiting and see what the ultimate implication will be on commercial real estate. As we wait for this to unfold, here are other macro issues to consider as you move forward with real estate investing. Whether you're buying a small multifamily in the suburbs or underwriting a large office building in a major metro area, your transaction will likely involve some level of capital. Those resources, especially funds coming from banks, private equity, or institutional lenders, will typically be deeply influenced by macro trends. When the Federal Reserve raises interest rates, for example, it immediately affects borrowing costs. Another effect relates to lenders, as they typically react by tightening their underwriting standards. For this reason, even if your local market is performing well, you might find fewer lenders willing to finance deals—or the terms become more expensive. In recent years, insurance premiums in commercial real estate have been influenced by natural disasters and the claims that follow. In some markets, especially where insurance used to be a minimal cost, there could now be higher associated charges. Similarly, macro policies like tariffs and taxes can drive up the cost of building materials, labor, and imported equipment. If you're involved in ground-up development or value-add renovations, this could lead to increases in your project's budget. Macro trends also influence how people view the real estate market and the decisions they make. When rates rise, buyers often opt for the sidelines and wait for price corrections. At the same time, sellers might get nervous if deal activity slows down. Conversely, when rates drop or a favorable economic policy is announced, markets may respond by an increase in transactions. Investors may step forward and sellers might raise their prices. You can set up a routine to follow macro trends and be aware of how they could impact your area. You might start by subscribing to newsletters and listening to podcasts which report on large-scale changes. Key indicators like the 10-year Treasury, inflation rates, unemployment data, and major policy announcements can also provide clues. You may also choose to follow the decisions lenders are making and trends in the debt market. You can check CMBS (Commercial Mortgage Backed Security) delinquency rates, for instance. CMBS is effectively a pool of loans which get bundled together and sold as a bond on the secondary market. The underwriting process and mechanics of the loan are effectively the same as a bank loan; however, there are some nuances. CMBS loans are typically non-recourse so they don't have a personal guarantee attached to them. They often get fixed rate financing for a 10-year term and are covenant driven, so there isn't as much of a relationship component as you might find with a local lender. Your deal may be in your neighborhood, but ultimately your success will depend on your ability to interpret and act on what's happening globally. Real estate is cyclical and macro trends do more than influence your market—they often set the tone. To stay ahead, you can follow the bigger picture to see what effects may come your way. This will help you be prepared to make informed decisions and take advantage of upcoming opportunities.
Yahoo
16-04-2025
- Business
- Yahoo
CMBS delinquencies soar
This story was originally published on Multifamily Dive. To receive daily news and insights, subscribe to our free daily Multifamily Dive newsletter. Multifamily commercial mortgage-backed securities loan delinquencies for apartments jumped 98 basis points in March to 5.44%, according to a report from data firm Trepp. A year ago, the delinquency rate for apartments was 1.84% — meaning it has risen 360 basis points over the past 12 months. The March rate is the highest since December 2015, when it was 8.28%. A separate report from Cred iQ said the multifamily distress rate fell 10 basis points to 12.9% in March. Apartments rank as the second most distressed asset type behind offices. The Trepp CMBS Delinquency Rate for commercial real estate increased 35 basis points to 6.65% in March. The overall balance was $39.3 billion, up from $36 billion in February. After retreating for the last two months, the rate is at a nearly four-year high. Cred iQ saw the overall CMMS distress rate for CRE decline for the second straight month, dropping 20 basis points to 10.6%. Delinquencies decreased 10 bps to 7.9% in March, while the special servicing rate fell 40 bps to 9.7%. Those figures stood at 5.4% and 7.4%, respectively, a year ago. Multifamily continues to be a trouble spot, according to Cred iQ. In a recently released analysis of fourth-quarter 2024 loan data, the research firm noted that apartment loan delinquencies at community banks jumped 39% from Q3 to Q4 2024. Total delinquent loans increased by $2.38 billion in Q4, hitting $8.49 billion by year-end. By comparison, that figure was $1.98 billion in Q2 2023. Loan losses also rose at community banks, according to Cred iQ. In 2023, those lenders took a $305.8 million hit on apartment loans, a 411% jump compared to 2022. In 2024, losses skyrocketed another 126% to $691.8 million. 'The uptick in delinquencies and losses points to broader challenges: rising interest rates, softening rents or maybe even over-leveraged borrowers,' according to the Cred iQ report. 'Whatever the culprits, the numbers don't lie — this is a trend worth watching.' Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday. Sign in to access your portfolio
Yahoo
12-02-2025
- Business
- Yahoo
Trepp Unveils AI-Powered Search, Expanding its Capabilities to Enhance Commercial Real Estate Business
Trepp announced today the launch of new artificial intelligence (AI) tools, including AI search, a powerful feature designed to enhance how professionals navigate and extract insights from TreppCRE. NEW YORK, Feb. 12, 2025 /PRNewswire-PRWeb/ -- Trepp, a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate (CRE), and banking markets, announced today the launch of new artificial intelligence (AI) tools, including AI search, a powerful feature designed to enhance how professionals navigate and extract insights from TreppCRE. Trepp's AI Search uses a proprietary generative AI (GenAI)-based model to allow users to ask complex, natural-language questions and instantly retrieve relevant commercial property, loan, and financial data. This enhancement simplifies the search process, making it faster and more intuitive for CRE professionals to find assets that match their investment or lending criteria. "Trepp has long been the industry's trusted source for market intelligence, and with AI Search, we're taking the next step in making our data more accessible and actionable," said Michael Holtzman, Chief Technology Officer at Trepp. "By integrating GenAI technology and machine learning, we are transforming the way our clients interact with our data – enhancing their efficiency and allowing them to access new opportunities, faster." AI Search is just one of several next-generation AI tools Trepp has introduced to strengthen market analysis capabilities for CRE professionals. Alongside AI Search, Trepp has also developed: AI-Powered Market Summary Chatbot – Quickly generates insights into any CRE market of interest. Hand-Selected Sales Comps – Unlocks AI-driven property comparisons tailored to specific investment needs. Income & Expense Comps – Allows for benchmarking of asset performance with AI-informed expense and revenue data. Financial Proforma Modeling – Creates detailed financial projections by using advanced AI models to leverage rapid comps, property size and age, demographics, and location data. "The evolution of AI in CRE is accelerating, and Trepp is at the forefront of delivering tools that drive smarter decision-making," said Lonnie Hendry, Chief Product Officer at Trepp. "These enhancements reflect our broader mission to blend Trepp's trusted data with state-of-the-art technology, to give our clients access to the tools they need to more effectively navigate today's real estate marketplace." For more information on Trepp's AI solutions and to experience AI Search firsthand, visit or request a demo here. About TreppTrepp, founded in 1979, is the leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase operational efficiencies, information transparency, and investment performance. From its offices in New York, Dallas, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT). Media Contact Ennys Soydas, Trepp, Inc., 212-754-1010, press@ Twitter View original content to download multimedia: SOURCE Trepp, Inc.
