Dive Brief:

• A portfolio of 187 apartment units, previously converted from eight industrial buildings in Kensington, a “gentrifying neighborhood” in Philadelphia, has been placed in special servicing, according to information Morningstar shared with Multifamily Dive.
• The apartments, known as the GM Holdings Portfolio, were transferred after multiple delinquencies during the first year of the loan term, which was originated in 2025, per Morningstar. The buildings range from three to 39 units. The loan has a lockbox, a mechanism for capturing cash.
• The borrower makes payments via check in multiple $25,000 increments during the course of the month. Several of these checks have bounced, resulting in delinquency, according to Morningstar. It notes that there is “no updated performance information to date” on the loan. GM Holdings did not respond to a Multifamily Dive request for comment.

Dive Insight: 

While other metros have consistently seen apartment properties go into servicing, CMBS distress has been limited in Philadelphia.

Last year, the loan on Storehouse Lofts, a 161-unit property in Philadelphia, was placed in special servicing after a payment default. The loan for the property, with $28 million outstanding, initially fell delinquent in January 2025 and moved to the 90-day category as of August.

Both Storehouse Lofts and the GM Holdings Portfolio were outside of Philadelphia’s central business district and one-offs, David Putro, head of analytics at Morningstar Credit, told Multifamily Dive in emailed comments.

“It’s in a gentrifying neighborhood that still needs to gentrify a bit more … same story with Storehouse,” Purtro said. 

The GM Holdings Portfolio wasn’t the only one to go into servicing recently. In March, the Trepp CMBS multifamily servicing rate increased 45 basis points to 8.75%. In addition, the delinquency rate increased 30 basis points month over month to 7.15% in March, pushing slightly above its previous high of 7.12% in October 2025. 

The majority of the defaults were concentrated in New York and New Jersey, with 48% of delinquent loan balances, and Houston, at 30%, Stephen Buschbom, head of applied research and analytics at Trepp, told Multifamily Dive in an emailed statement. “That’s nearly 80% of the new distress concentrated in just two markets,” he said.

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