Apartment Distress Falling Farther, 2 Reports Show via Multifamily Executive Magazine

Two different reports paint an improving picture of apartment distress.

In the most recent quarterly report from New York–based Real Capital Analytics (RCA), the market research firm said that new instances of apartment-market distress fell to $1.5 billion in the first quarter of 2012, the lowest quarterly total since 2007. Most of those cases are coming from maturity defaults of CMBS loans. Work-out activity also slowed last quarter, totaling $1.9 billion after coming in at $5.2 billion for the first quarter of 2011, according to RCA.

Work-outs exceed inflows of distress as lenders have reduced apartment distress by 14 percent over the past year. Domestic banks and agencies have led the pack by reducing their distress by more than 20 percent over the past year. They’ve cleared 60 percent of their problem loans since the downturn began. CMBS lenders are behind them, clearing only about 40 percent of distress, according to RCA.

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