NYC Rent-Stabilized Apartments in Distress

adminboz — Wed, 22 Nov 2023 17:39:44 +0000

With reduced lending options and sky-high operational costs, the rent-stabilized market in the Big Apple is facing a challenging future.

While most have been focussed on the office category of the Commercial Real Estate Market CRE market, the owners of rent-stabilized apartments in NYC are experiencing a crisis as well. The strain of a restricted rent roll coupled with increased costs has led to rising delinquency rates and foreclosures.

Delinquency rates on loans backed by rent-stabilized buildings have risen, with rates reaching 4% as of October, up from 2.9% at the start of the year. In contrast, buildings built after 1974, which are more likely to contain market-rate apartments, had a delinquency rate of just 0.02%.

Lenders are becoming less patient with owners on mortgage payments adding more pressure to a market where roughly 10–15% of loans on NYC’s rent-stabilized multifamily units are expected to come due soon, potentially deepening the distress in the market.

Distressed sales, lower property values, and the potential for buildings to fall into disrepair pose a threat to both landlords and tenants. Finding solutions to ensure liveable conditions and stability in the housing market is crucial to mitigate the impending crisis for rent-stabilized apartments in NYC.

Image Credit The Real Deal

Content Credit BisNow &

The post NYC Rent-Stabilized Apartments in Distress first appeared on Basil Boziotis.

Soaring interest rates hammer Commercial real estate by 13%

adminboz — Tue, 15 Nov 2022 16:12:20 +0000

According to the Green Street Commercial Property Price Index, commercial property prices tanked 13% from their peak in May, taking a 7.3% hit in October. Multiple CRE sectors are suffering double-digit losses; apartments, offices, healthcare facilities, and strip malls. Industrial properties fell by 17%, second only to shopping malls, which are down 24%.

Still dodging and weaving: A few sectors have proven more resilient than others amid the price declines. Hospitality is staying strong, only experiencing a 6% price drop since the sector’s peak in May 2022. Self-storage is in the same boat, with prices down 6% as well.

THE LONG & SHORT OF IT

The ongoing war against inflation: Last week, the Fed hiked the key federal funds rate by 75 basis points to battle 40-year high inflation. It was the sixth rate increase this year, and it raised short-term borrowing rates to their highest levels since the Great Recession. “As large as the decline in pricing has been, I don’t think we’re out of the woods,” said Peter Rothemund, co-head of strategic research at Green Street.

Story courtesy of CRE Daily

Image Credit #SeanPollock

The post Soaring interest rates hammer Commercial real estate by 13% first appeared on Basil Boziotis.