CRE

Apartment buildings, which make up about 40% of the looming maturities, are at the center of the refinancing wave. Many U.S. owners bought their properties using three-year floating rate loans during the easy money era.

While the total dollar volume of apartment originations fell last year, the number of companies making loans increased from 2022, the Mortgage Bankers Association said.

Retail properties account for the largest portion, at 23.5%, according to KBRA. Lodging follows, with 22.1% of the pool.

First Foundation in Dallas recently got a $228 million capital injection led by Fortress Investment Group. Now it's announced plans to pivot away from its heavy focus on multifamily loans, which lost value as interest rates rose.

For at least the fifth consecutive quarter, the Providence, Rhode Island, company increased its allowance for credit losses on general office loans, which continue to be a problem area for banks.

A decline in interest rates during the first quarter drove a Freddie Mac indicator higher for the first time since mid-2023, while a leading investment firm announced a deal aimed at boosting originations for government-sponsored enterprise financing.

In talks with OCC officials, "it became obvious that we would not gain near-term approval given their recent experience with multifamily and CRE positions," FirstSun CEO Neal Arnold says. The companies announced other revisions to their deal, too.

She cited the increase in interest rates, higher vacancy rates thanks to shifting work patterns triggered by the pandemic and a wave of commercial real estate loans coming due this year.

The share of loans in Arbor's CLOs that failed to make a scheduled payment more than doubled in the fourth quarter, according to preliminary data compiled by Banco Santander SA.

Stress tests suggest systemically important depositories could weather current risks. Meanwhile, single-family arrears remain low, but that business could be impacted.