Category Archives: Investing

MBA: Delinquencies remain at rock bottom for commercial/multifamily loans

Delinquency rates for commercial and multifamily mortgage loans remain near rock bottom, according to the Mortgage Bankers Association’s latest Commercial/Multifamily Delinquency Report.

“Mortgages backed by commercial and multifamily properties continue to perform extremely well,” MBA Vice President of Commercial Real Estate Research Jamie Woodwell said in a statement. 

“Delinquency rates are at or near their all-time lows across most capital sources. This continues to be driven by strong property fundamentals, increasing property values, still-low mortgage rates and readily available financing,” he added.

The report looks at delinquency rates for five of the largest investor groups: commercial banks and thrifts, commercial mortgage-backed securities, life insurance companies, Fannie Mae and Freddie Mac.

Q1 delinquencies based on unpaid principal balance by group are as follows, according to the report:

  • Banks and thrifts (90 or more days delinquent or in non-accrual) = 0.51%, unchanged from the fourth quarter of 2017.
  • Life company portfolios (60 or more days delinquent) = 0.02%, a decrease of 0.01 percentage points from the fourth quarter of 2017.
  • Fannie Mae (60 or more days delinquent) = 0.13%, an increase of 0.02 percentage points from the fourth quarter of 2017.
  • Freddie Mac (60 or more days delinquent) = 0.02%, unchanged from the fourth quarter of 2017.
  • CMBS (30 or more days delinquent or in REO) = 3.93%, a decrease of 0.15 percentage points from the fourth quarter of 2017.


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The amount of money in our paychecks is slowly increasing

Although unemployment is near a historic low, wage growth continues to threaten U.S. economic recovery, according to an article by Lydia DePillis for CNN.

The Bureau of Labor Statistics‘ Current Employment Survey’s data on the private sector states, when adjusted for inflation average weekly earnings rose 0.3% in May to $928.74, from 2017. However, although earnings increased from 2014-2015, they remained stagnant when workers did not continue at the same pace, according to the article.

From the article:

For workers who don’t manage others, earnings growth has slowed. When taking a look at production and non-supervisory workers, who don’t manage other people, earnings have been functionally flat for the past two years.

This data set divides their earnings by the hour rather than the week and found that wages for this group have only risen 7 cents since May 2016, to an average of $22.59 per hour. By comparison, earnings for all workers, including managers, have grown by 16 cents, to an average of $26.92 an hour

The national decrease of unemployment means employers have more pockets to fill, but healthcare, insurance, retirement, paid leave and other benefits make employees too expensive, according to the article.

The article states that despite a low unemployment rate, wage growth has not managed to increase in a manner that will meaningfully improve the lives of American workers. As it stands, workers need to earn much higher than minimum wage if they hope to make it onto the property ladder.


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Former NFL kicker to invest $25M in Cincinnati apartments

Doug Pelfrey, one of the Cincinnati Bengals’ all-time leading scorers, is going to invest over $25 million in multifamily housing across the Cincinnati metro, according to the Cincinnati Business Courier.

Pelfrey, place kicker for the Bengals from 1993 to 1999, is the co-founder of Blue Tide Partners, a real estate investment firm. He and his partner, Tom Miller, recently secured a $25 million bridge loan from Columbia Pacific Advisors to acquire a nine-property portfolio in the Greater Cincinnati area.

The portfolio encompasses 435 units across the nine, value-add properties which are in need of significant rehabilitation before they are up to snuff.

“Despite the very clear need in the marketplace, it is very difficult to get conventional financing to acquire and improve multifamily properties in need of significant rehab,” Miller said in a statement.

“Columbia Pacific Advisors understood the asset class, the need in the market and were confident in our ability to meet the challenges,” he added.

Pelfrey and Miller anticipate sinking about $50 million into their properties for renovations and expect to finish the upgrade program by June next year.

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