The value of the collateral behind the $384 million loan backing the NEMA San Francisco apartment complex that sits next to the headquarters of social media giant X (formerly known as Twitter) fell below the loan balance, according to an October report from real estate data firm Trepp.

In 2018, the collateral behind the 754-unit apartment complex — developed, owned and operated by Miami-based real estate firm Crescent Heights — was valued at $543.6 million. It was recently lowered to $279 million. In August, the loan was sent to special servicing.

The Landings at Northpoint, a 292-unit complex in the Greenpoint neighborhood of Houston, was sold at a foreclosure auction in October, according to Bisnow. The Real Deal said the property, owned by an LLC linked to Michigan-based investor Dylan Borland, received a $20 million loan from Prudential Affordable Mortgage Company in 2021. Special servicer CWCapital now oversees the loan.

In September, MF1 Capital foreclosed on a 282-unit complex in Houston after making a $49.9 million bid for the property. The previous owner, Houston-based Rockstar Capital, defaulted on a $51 million loan tied to the property. MF1 provided that loan and subsequently rolled it into a packaged loan obligation, according to The Real Deal.

Rockstar’s problems mirror those many other apartment firms are facing right now. By the end of 2022, the debt service coverage ratio dropped to 0.96 at Rockstar’s 282-unit complex in Houston. At the same time, occupancy had fallen below 75%, according to The Real Deal.

A group of New York City workforce apartments is facing financial stress, according to a September report from credit ratings agency DBRS Morningstar.

Emerald Equities’ 28-property portfolio, comprising 747 units in multiple neighborhoods in the Bronx, is secured by eight loans. Seven of those loans, covering 25 properties and 663 units, were transferred to special servicing over the summer for imminent monetary default.

The Emerald portfolio is reporting cash flows significantly below issuance expectations, as the properties backing the defaulted loans continue to “show sharp value declines from the issuance appraised values,” according to DBRS Morningstar.

The nearly 3,200-unit Parkmerced apartment complex, which carries $1.5 billion in debt, was highlighted as a “problematic property” by Trepp in August. The complex’s occupancy declined from 94% to 76% between 2019 and 2020. The debt service coverage ratio of the three loans backed by the asset fell to 0.39x in 2022.

Trepp in August reported that the five-asset Mosser Swig portfolio, which has DSCR levels below 1.2x, was affected by problems in San Francisco. “A significant majority of these properties are situated within a mile of the Tenderloin neighborhood, which is identified as the epicenter of crime affected business areas,” it said in a report.

A $384 million loan backed by NEMA San Francisco, a 754-unit residential tower in San Francisco next to the headquarters of social media giant X (formerly known as Twitter), has been sent to special servicing, according to a report from real estate data firm Trepp. 

The property — developed, owned and operated by Miami-based real estate firm Crescent Heights — began struggling financially around the time of the COVID-19 shutdowns, according to Trepp. The loan’s debt service coverage ratio level has posted below 1.0x since 2020, and its net cash flow has come in below 1.0x since late July. 

The loan faces imminent default, according to Trepp, and the borrower has stated in writing that it can no longer cover the monthly debt service.—Mary Salmonsen contributed to this report.

A $195.8 million loan backing The Aire, a 310-unit luxury apartment tower in the Upper West Side of Manhattan in New York City, went into special servicing in June, according to a Trepp email shared with Multifamily Dive. The asset is owned by New York City-based A&R Kalimian, according to Commercial Observer.

Trepp reports that the occupancy at the property, which also has street-level retail, fell from 97% in 2018 to 70% in 2020. Although occupancy rebounded to 97%, The Aire’s debt service coverage ratio has sat below 1.0x since 2017. The DSCR dropped to 0.36x in 2021 before rising to 0.84 times in 2022.

In 2013, The Aire was valued at $365 million. The current loan, which matures in November, is broken up into a $117.5 million piece and a $78.3 million slice. The deals are part of the CMBX 7 index, which includes a mix of retail, office, multifamily, lodging and industrial loans.

Loans backing 61 beleaguered multifamily properties in San Francisco were offered for sale in May, according to The San Francisco Business Times.

Two securitized deals back the properties, owned by a joint venture between San Francisco-based Veritas Investments and affiliates of Boston-based Baupost Group, according to data provider Trepp. One has a balance of almost $350 million, while the other has a balance of $104 million. There is also non-securitized debt by insurance companies, bringing the total debt stack to almost $675 million, according to a Trepp note shared with Multifamily Dive.

The properties are struggling from an occupancy perspective, only sitting at 65%, according to Trepp. Last year, the data provider put out a report saying that “the loan was facing imminent maturity default and that the borrower was not going to exercise its extension option.” 

Arbor Realty Trust foreclosed on four Houston apartment properties totaling 3,200 units after Dallas-based Applesway Investment Group defaulted on nearly $230 million in loans in April.

In a statement to Multifamily Dive, Arbor said that it took no loss on the loans and restructured the debt, despite reports saying otherwise. New York City–based investment firm Fundamental Partners, an existing investor, recapitalized the transaction.

Applesway, led by founder Jay Gajavelli, purchased the Heights at Post Oak, Redford Apartments, Reserve at Westwood and Timber Ridge Apartments between August 2021 and April 2022.

A $270.35 million loan backing 11 apartment properties — totaling 637 units — owned by Blackstone went into special servicing in February, according to Trepp.  

Sources told Multifamily Dive that Blackstone’s 11-property portfolio faced certain deal-specific headwinds, including higher-than-expected capital expenditures and increased borrowing costs for floating-rate debt.

Although Blackstone remains committed to apartments, sources said the company believed it was not in its best interest to continue to fund shortfalls at the Manhattan properties. By letting the assets go into servicing, the company can engage its lenders about how to best move forward.

The Chetrit Group has taken steps to reduce its debt in an 8,671-unit portfolio comprising 43 properties in 10 states. The $481 million loan backing the assets went into special servicing for default in November, according to Trepp.

The New York City–based firm paid down $100 million of the loan in November and is under contract to sell 12 of the assets in the loan pool in Tennessee, Florida, Indiana and Ohio, according to The Real Deal. The company is working with special servicer SitusAMC on a forbearance agreement, a spokesperson told The Real Deal. The property sales should bring in roughly $175 million.

In addition to the 43-property portfolio, Chetrit’s $225 million mortgage, securitized through PKHL Commercial Mortgage Trust, for the 538-unit Parkhill City apartment complex in Queens, New York, was newly delinquent at year-end. The property was not stabilized when the loan was originated, according to Trepp. 

A joint venture between San Francisco-based Veritas Investments and affiliates of Boston-based Baupost Group has defaulted on a $448 million loan backing 1,734 rent-controlled units in 62 multifamily properties across San Francisco, according to Fitch Ratings.

The Veritas multifamily pool comprised over 40% of the maturity default volume in commercial mortgage-backed securities in November. Sixty-plus day delinquencies jumped from $283 million in November to $911 million across commercial real estate in December. Thirty-day delinquencies increased to $642 million in December from $514 million in November, according to Fitch.