Private-label CMBS holds $75.48 billion of multifamily debt. Private-label CMBS has a 7.69% delinquency rate. Freddie Mac has $518.99 billion of multifamily debt outstanding. Freddie Mac's delinquency rate is 0.80%.
A total of $11.6 billion of securitized multifamily loans was delinquent in August. Half of that delinquent debt sits in private-label CMBS deals. Private-label CMBS accounts for just 12% of the total outstanding balance.
I read this as a sign that where a multifamily loan sits matters as much as the loan itself.
Commercial real estate collateralized loan obligations (CRE CLOs) hold $41.3 billion of debt. CRE CLOs have a 3.88% delinquency rate. Two years ago, CRE CLOs accounted for about 40% of delinquent multifamily debt.
CRE CLO managers can remove defaulted or credit-impaired loans from transaction pools. A CRE CLO with $1 billion of loans and $800 million of notes would have a 125% overcollateralization ratio.
The distribution of delinquent multifamily debt has changed substantially over the past two years.
Ask what your own lender's delinquency rate is.