Multifamily commercial real estate distress

Distressed multifamily asset sales in Chicago, LA, and Florida will increase transaction volume by 35-50% year-over-year in Q1-Q2 2024, resulting in median cap rates compressing to 5.2-5.8% as value investors enter the market

Servicer transitions on multifamily loans will result in increased loan modification activity, with default rates on multifamily mortgages rising from current levels to >8% by Q2 2024 in the three affected metropolitan areas

Multifamily REIT distress in major markets (Chicago, LA, Florida) will trigger a 12-18% decline in equity valuations of residential REITs with >40% portfolio exposure to these regions within 90 days