Is a Wave of Distress Building?

Data on multifamily loan delinquencies and special servicing shows a slow buildup throughout 2024 that could lead to greater distress in 2025, which is particularly relevant given the challenges expected for multifamily operations with apartment supply still elevated and economic uncertainty putting downward pressure on rent growth. better prospects moving forward which could create investment opportunities as the year progresses.

Multifamily, the Nation, and the Economy

Multifamily and the Housing Market

Will Fannie Mae and Freddie Mac Exit Conservatorship This Year?

Trepp: “Given this large volume of recent originations, large waves of maturities over the next several years will sustain the market for refinancing activity. Consequently, the important role the GSEs play in CRE financing markets is expected to expand further, serving as both a borrower option and a key source of commercial paper.”

Multifamily Markets and Reports

Five Ways Residential Mobility Has Changed in the Pandemic Era

Harvard Joint Center for Housing Studies: “[N]otable [migration] shifts took place in many states in the Midwest and Northeast, where outflows were either lower than they had been before the pandemic, or net outflows had switched to net inflows. This may be evidence of a coming shift in migration towards ‘Snow Belt’ states.”

Commercial Real Estate and the Macro Economy

CRE in a Post-Pandemic World

Via Cushman & Wakefield: “In the immediate wake of the pandemic, CBD multifamily occupancy cratered by over 375 basis points (bps). People, especially young renters-by-choice, moved out of cities[, but t]he exodus was temporary. Multifamily occupancy levels returned to and exceeded pre-pandemic norms by the end of 2021.”

Other Real Estate News and Reports

US Consumer Confidence tumbled again in March

Via The Conference Board: “Views of current business conditions weakened to close to neutral. Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low.”