After a brief decline in November, distress in multifamily CMBS loans U-turned higher again in to finish the year. The chart below shows the percentage of multifamily CMBS loans delinquent, with special servicers or unable to be paid off at maturity (green line).

It’s important to note that CMBS loans make up a small percentage of the multifamily pie, but they provide more transparent information compared to other loan types.

Industrial saw a large drop in December as a few very large loans were able to get worked out.

Source: CrediQ

Every city showed rent declines month-over-month and the last quarter of 2023. Only two (Rock Hill and Garner) managed to barely stay positive over the last six months.

City	1 Month	3 Month	6 Month	1 Year
High Point, NC	-0.80%	-3.38%	-7.00%	-11.01%
Matthews, NC	-1.21%	-4.45%	-5.89%	-6.64%
Wilmington, NC	-0.92%	-2.40%	-3.95%	-4.38%
Morrisville, NC	-0.40%	-4.79%	-7.44%	-4.35%
Raleigh, NC	-1.15%	-3.27%	-4.13%	-2.97%
Cary, NC	-0.93%	-2.42%	-3.43%	-2.68%
Durham, NC	-1.23%	-3.32%	-3.80%	-2.01%
Simpsonville, SC	-0.90%	-2.88%	-5.09%	-1.46%
Burlington, NC	-1.16%	-3.39%	-3.15%	-0.75%
Charleston, SC	-1.00%	-4.25%	-4.83%	-0.70%
Mount Pleasant, SC	-0.87%	-1.81%	-1.13%	0.35%
Winston-Salem, NC	-1.57%	-4.15%	-3.32%	0.80%
Mooresville, NC	-0.36%	-0.36%	-2.09%	0.86%
Apex, NC	-0.72%	-2.83%	-2.95%	2.30%
North Charleston, SC	0.00%	0.27%	-0.99%	2.43%
Greenville, SC	-0.09%	-0.88%	-0.61%	2.91%
Greensboro, NC	-0.54%	-2.72%	-3.58%	2.94%
Chapel Hill, NC	-0.97%	-0.97%	-0.92%	2.97%
Fayetteville, NC	-2.40%	-5.43%	-4.37%	3.09%
Charlotte, NC	-1.00%	-2.49%	-2.13%	3.18%
Rock Hill, SC	-0.46%	-0.18%	0.89%	3.25%
Garner, NC	-0.08%	-0.24%	1.33%	3.47%
Huntersville, NC	-0.90%	-0.90%	-2.07%	4.08%
Gastonia, NC	-0.98%	-0.88%	-2.03%	4.10%
Columbia, SC	-0.39%	-1.63%	-1.47%	5.35%

Source: Apartment List

It’s more helpful to look at the increase in supply for a city based on the percentage of the current inventory vs. the total number of units.

1,000 new units added to Orlando with a population of 309,000 has a much larger impact than 1,000 new units added to Los Angeles with a population of 3,849,000.

Less permits lead to less starts, which lead to less completions.

Source: RealPage

Data Source:	Data Month:	MOM Change:	Annual Change	Data Release:
Green Street	Nov 2023	1.3%	-12.0%	December
MSCI	Nov 2023	-0.7%	-12.1%	December
	Average:	0.3%	-12.1%

One third of U.S. households are renters (45 million units).

Mom and Pop’s own the majority (80%) of the single-family investment properties:

However, there are certain cities where institutional investors own a higher concentration:

RentCafe.com analyzed the 139 largest markets in the U.S. where data was available and ranked them based on five key metrics when it comes to rental competitiveness. These metrics were:

• the number of days apartments stayed vacant
• the percentage of rentals that were occupied
• the number of prospective renters competing for an apartment
• the percentage of renters who renewed their leases
• the share of apartments completed this year

They then used these metrics to calculate a Rental Competitivity Index (RCI) to see how competitive the U.S. rental market was this year.

Here are how the major city/regions ranked in North Carolina, South Carolina and Georgia:

Market	2023 Score	Vacant Days	Occupancy:	Prospective Renters	Renewal Rate	% Of New Apts
Asheville, NC	110	30	95.50%	12	65.50%	1.30%
Fayetteville, NC	89	30	94.20%	9	66.00%	1.71%
Columbus, GA	74	32	94.00%	8	62.70%	2.30%
Savannah, GA	69	35	94.20%	11	58.50%	2.57%
Greenville, NC	63	37	93.90%	6	62.20%	1.38%
Greenville, SC	60	35	93.30%	9	59.90%	3.28%
The Triangle, NC	58	34	93.60%	8	60.70%	3.80%
Columbia, SC	56	36	93.00%	11	55.20%	0.72%
Charlotte, NC	54	36	93.20%	9	60.50%	4.19%
Macon, GA	50	41	92.90%	9	62.10%	1.68%
Suburban Atlanta, GA	49	44	92.70%	8	64.40%	2.88%
Athens, GA	49	38	92.50%	8	63.60%	5.16%
Charleston, SC	42	37	92.80%	9	57.00%	5.15%
Augusta, GA	39	40	91.30%	7	63.40%	5.51%
Wilmington, NC	37	37	92.30%	7	60.60%	3.54%
Atlanta, GA	35	41	91.90%	9	59.30%	2.07%
Piedmont-Triad, NC	33	42	92.00%	8	60.30%	2.86%

Source: RentCafe

Delinquencies remain low at Freddie Mac (0.29%), Fannie Mae (0.54%) and banks (0.40%). The trouble is brewing in the $67 billion of CMBS, CDO and ABS loans.

Multifamily debt by lender

Debt holder	Percentage	Total held
Agencies and GSEs	48%	$986 billion
Banks and thrifts	30%	$606 billion
Life insurance companies	11%	$223 billion
State/local governments	6%	$115 billion
CMBS, CDO and ABS	3%	$67 billion

Source: Multifamily Dive

The U.S. Census Bureau released their annual population trends data for 2023 yesterday. Americans continue to leave the northeast with the south experiencing the largest inflow of new residents; accounting for 87% of the nation’s growth in 2023.

Top 10 States by Numeric Growth: 2022 to 2023
1. Texas – 473,453
2. Florida – 365,205
3. North Carolina – 139,526
4. Georgia – 116,077
5. South Carolina – 90,600
6. Tennessee – 77,513
7. Arizona – 65,660
8. Virginia – 36,599
9. Colorado – 36,571
10. Utah – 36,498

Top 10 States by Percentage Growth: 2022 to 2023
1. South Carolina – 1.7%
2. Florida – 1.6%
3. Texas – 1.6%
4. Idaho – 1.3%
5. North Carolina – 1.3%
6. Delaware – 1.2%
7. District of Columbia – 1.2%
8. Tennessee – 1.1%
9. Utah – 1.1%
10. Georgia – 1.1%

Source: U.S. Census Bureau

As of November 2023, apartment owners are paying an average of $65 per unit per month ($780 annually), up 119% in the last 4 years. Rates averaged $30 per unit per month ($360 annually) in November 2019.

Source: RealPage