Although loans backing office properties are the most scrutinized these days, a wall of debt is also maturing within the multifamily sector in the coming years.
And while multifamily continues to be seen as one of the safer asset classes, already, there’ve been recent examples of loan defaults on multifamily portfolios, including four properties in Houston totaling 3,200 units that went to foreclosure last month.
Aaron Jodka, director of national capital-markets research at Colliers International Group Inc. (Nasdaq: CIGI), said the multifamily market right now is an interesting test case — while rents aren’t growing as fast as they were 18 months ago, many markets continue to see positive growth and occupancy remains strong.
Looking strictly at the apartment market, nationally, net absorption was 19,243 in the first quarter of 2023, and occupancy stood at 94.7% in March, a drop from the peak of 97.6% in February 2022 but about the same as the average observed in the decade before the pandemic, according to RealPage Inc. Same-store effective asking rents for new apartment leases increased 0.3% in Q1.
