Trepp Multifamily Occupancy Analysis: Areas of Concern Starting to Appear in Major US Markets

Share Article

Trepp has started to see signs of "fraying" in the apartment segment in some major U.S. markets. While overall apartment occupancy has fallen only a percentage point or two in aggregate over the last year, the percentage of loans where occupancy has fallen to under 80% has become quite large in some markets.

News Image

Trepp, a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets, has released an analysis on multifamily occupancy across the United States. The analysis can be accessed here: https://info.trepp.com/trepptalk/multifamily-occupancy-analysis-areas-of-concern-in-major-us-markets.

At this point in 2021, most borrowers in the multifamily space have submitted net operating income (NOI) and occupancy for their commercial real estate (CRE) loans for either the full-year 2020 or at least the first nine months of 2020.

A look at this data reveals that while some markets have held up extraordinarily well, others are showing some weakness. Whether this weakness translates into higher delinquencies down the road will determine how strongly the U.S. economy rebounds later this year and what percentage of workers return to the office for a full workweek.

Trepp looked at 2020 occupancy data for apartment loans to see how it varied from city to city and Metropolitan Statistical Area (MSA) to MSA.

"The multifamily housing market in the U.S. is not facing the same problems that the market has seen in the retail and hotel spaces. For the latter two property types, we have seen an almost across-the-board unraveling of those segments," said Manus Clancy, Trepp Senior Managing Director.

"That being said, Trepp has started to see signs of "fraying" in the apartment segment in some major U.S. markets. While overall apartment occupancy has fallen only a percentage point or two in aggregate over the last year, the percentage of loans where occupancy has fallen to under 80% has become quite large in some markets," Clancy said.

In total, data for more than 22,000 properties has been submitted for 2020 between the CMBS private-label loans and Freddie Mac loans. Of that total, 4.8% of the properties have a 2020 occupancy of less than 80%. (That number is by property count – it is not loan-balance weighted).

However, the distribution of the data shows some real areas of relative weakness. In some cities, occupancy has held up well during the pandemic. For more details, such as the "winners" in the segment, the cities with challenges, and more, read Trepp's analysis here: https://info.trepp.com/trepptalk/multifamily-occupancy-analysis-areas-of-concern-in-major-us-markets. For daily CMBS and CRE commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, founded in 1979, is a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase operational efficiencies, information transparency, and investment performance. From its offices in New York, San Francisco, and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance, and portfolio management. Trepp subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT).

Share article on social media or email:

View article via:

Pdf Print

Contact Author

Hayley Keen
@TreppWire
Follow >
Visit website