Dive Brief:

• Commercial mortgage-backed security loans for apartments posted low delinquency rates in February, coming in at 1.51%, according to Trepp, a data and analytics firm.
• Despite the low delinquency rate, some properties still face issues with their loan payments. The five largest CMBS loans backed by multifamily properties that are 90 days or more behind on payment include properties in Brooklyn, Philadelphia and Midland, Texas.
• CMBS loans, which are grouped together and packaged into bonds sold to investors, were the second most popular form of financing for apartment investors last year, ranking behind government agency loans from Fannie Mae and Freddie Mac, according to information that Real Capital Analytics supplied to Multifamily Dive. CMBS lenders claimed an all-time high of 15% of multifamily loans in 2021.

Dive Insight:

In an apartment market that has seen torrid rent growth, the vast majority of owners are paying their loans on time. However, as Trepp's list shows, even in good times with almost entirely occupied properties, there can be distressed situations where borrowers miss payments.

Here is a snapshot of the five properties:

• 1209 Dekalb in Brooklyn: The 127-unit property, built in 2013, is backed by a $46 million loan. Over the past seven years, the asset's value has been reduced three times — from $63.6 million to $42.8 million, according to Trepp.
• Lofts 640: The 265-unit, mixed-use property was built in 1913 and renovated in 2006, according to Trepp. It is backed $39.7 million loan and is 97% occupied, proving that nearly full properties can face issues.
• Park at Caldera: The 358-unit apartment complex is backed by a $33.1 million loan, which has been delinquent since November 2021, according to Trepp. The asset is currently 88% occupied.
• The Depot: A $27.86 million loan backs The Depot, a 624-unit student housing property near the University of Akron, according to Trepp. The community, built in 2014, saw occupancy fall to 58% in 2015. Currently, it is still struggling with occupancy at 82%.
• Monarch 815: The 576-bed student housing property near East Tennessee State is backed by a $30.17 million loan. As of January, occupancy sat at 97%, according to Trepp.

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