Multifamily Loan Losses Spike

The loss rate for apartment loans last year reached 16%, up from around 5% in the prior two years, according to MSCI’s U.S. Capital Trends report released Wednesday.

The rate of losses is still less than half of what it was during 2009, when lenders were taking losses on 37% of apartment loans, but MSCI said the “upward momentum is concerning.” 

While it experienced the sharpest increase last year, the apartment sector's loss rate is still below that of office and retail, which have remained above 20% for most of the last decade. 

The year ahead looks like it will only bring more distress to multifamily.

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