Multifamily Market Approaches ‘Hydrogen-Bomb Scenario’ As CMBS Loans Come Due
Climbing interest rates have the potential to hit borrowers in the multifamily particularly hard. Why? Number one, developers borrowed heavily in 2021 when rates were low. Two, those rates are about to skyrocket. Three, more than half the amount used to build housing was provided by small and regional banks, which aren’t as quick to loan after the collapse of Silicon Valley Bank. So we’re looking at an “$8B tsunami of multifamily commercial mortgage-backed securities” through the end of 2023, with a total of $980.7B due from 2023 to 2027, and some property owners are already getting hit.
