KBRA Releases Research – New York City Leads CMBS Multifamily Issuance as Distress Jumps

KBRA releases research analyzing New York City multifamily (MF) issuance and performance across CMBS conduits securitizations.

MF conduit issuance surged in 2024 to $6.7 billion, 4x the prior year’s level. This marks the highest volume of MF conduit issuance since 2019, when it reached $6.9 billion. As a percentage of total conduit issuance, MF represented 20.5%—at least 486 basis points (bps) higher than each of the last five years. NYC led 2024 MF issuance, representing over one-quarter (27%) of the year’s total MF issuance volume and more than 4.4x the next-highest city’s volume.

NYC is also meaningfully contributing to the rise in MF conduit delinquencies. The MF distress rate, which includes loans that are delinquent or current and in special servicing (SS), was at 8.5% as of year-end (YE) 2024. NYC MF currently represents 43% of the MF distressed balance, with a distress rate of 14.4% at YE. This is more than double the city’s YE 2023 distress rate of 7%.

This report provides an overview of NYC MF metrics, including the exposure and performance by building age and borough, as well as an outlook for the year ahead. We also summarize rent regulations and housing programs that impact a meaningful portion of NYC MF loans—by dollar volume, over 90% of the $1.8 billion NYC MF loans in 2024 KBRA-rated conduits are subject to some form of rent regulation or participate in a housing assistance program.

Key Takeaways

• By loan count, 2024 had the highest NYC MF conduit percentage, accounting for approximately one-third (32.2%) of MF exposure. By loan balance, it was at 27%.
• The city’s MF distress rate, which reached 14.4%, was distinctly bifurcated by property age. Pre-1974 NYC properties, which have a much higher proportion of rent-stabilized buildings, had a 25.1% distress rate by balance compared to post-2000 properties, which had a distress rate of 2.9%. These two vintage cohorts constituted 98% of the study population.
• Manhattan had the highest distress rate of the five boroughs at 29.8%, followed by Queens (7.5%) and Brooklyn (3.2%).
• The two programs with the most participation across 2024 NYC MF loans in the KBRA-rated conduit population were 421-a and Family Homelessness and Eviction Prevention Supplement (FHEPS), per KBRA’s observations.

Click here to view the report.

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About KBRA

KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

Doc ID: 1008170

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