Explore the Top 50 Markets Ranked by CRED iQ Distress Metrics
- Justin Brennan
- Oct 17, 2024
- 2 min read
In this blog post, we explore recent research from CRED iQ, which sheds light on geographic distress trends across the U.S. multifamily real estate market. By analyzing current loan balances in major metropolitan statistical areas (MSAs), the CRED iQ team calculated distress rates, combining both delinquent and specially serviced loans, to give a clearer picture of market performance.
Top MSAs with Highest Distress Levels
Among the top 50 MSAs, Charlotte leads with a 24.8% distress rate, followed by Minneapolis (23.6%), San Francisco(20.1%), Trenton (17.6%), and Tulsa (16.3%). The overall distress rate across all U.S. markets stands at 8.8% as of July 2024, providing a broader sense of the market landscape.
Strongest Performing Markets
Some markets, like Tampa, stand out for their low distress rates at 2.6%, while Orange County, Riverside, Nashville, and Austin also show resilience with distress rates under 3%.
Noteworthy Distressed Loans
A major distressed loan highlighted in the research is a $152.3 million loan tied to Northlake Mall in Charlotte. The loan has been in special servicing since 2019 due to a balloon payment default, and the property, valued at $253 million in 2014, now faces occupancy challenges with only 72.4% filled.
Early Warning Signals
CRED iQ also identified early warning signals of upcoming distress, including loans flagged for issues such as low occupancy, weak financial performance, and upcoming maturity risks, which can alert investors to potential problems.
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