NEW YORK, NY – Trepp, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its March 2020 US CMBS Delinquency Report.
The Trepp CMBS Delinquency Rate inched up in March, a rare break from the downward trend that has extended for nearly three years. The March reading was 2.07%, an uptick of three basis points from February. At least for now, heavy new issuance from late last year added performing supply to the denominator and some of the defaulted legacy loans continued to get resolved away in February.
The downward pressure of both variables on the delinquency rate should be reduced in the coming months with new issuance having stalled, distressed property sales being postponed, and COVID-19 related delinquencies starting to represent a new inflection point. Time will tell if the February level of 2.04% represents a post-crisis low for a long time to come.
For those looking for a large COVID-19 induced uptick in March, that was always unlikely, said Trepp Senior Managing Director, Manus Clancy. With most loans having payments due on the first of the month, most borrowers for performing loans would likely have made their March payment – this was before the industry gained more clarity on the magnitude of the outbreak’s disruption to businesses.
The largest rate drop among major property sectors in March belonged to the multifamily sector, with its delinquency reading dropping 16 basis points to 1.63%. The overall CMBS 2.0+ delinquency rate ticked up two basis points in March to 0.91%, up 26 basis points year over year. The retail delinquency rate climbed 27 basis points to 3.89%. Retail remains the worst-performing major property type.
For additional details, such as historical comparisons and analysis on all major property types, download the March 2020 US CMBS Delinquency.

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MONTGOMERY, AL – Elevation Financial Group, a provider of multifamily and senior affordable housing, announced the sale of Elevation Real Property Fund V asset, Serenity Apartments at the Park. The 176-unit multifamily property located in Montgomery, Alabama, sold for $5.28 million.
With this sale, Fund V experienced a healthy profit reflective of Elevation’s initial acquisition having a very low basis, as well as the Fund’s success in repositioning the asset to be worth several million dollars more. In spite of the market turmoil around coronavirus, Elevation was able to attract strong sub-market pricing per unit (nearly $11,000 more than per unit acquisition pricing) and bring the asset to closing.
“In the midst of a national pandemic and an economic nightmare for market investors, Elevation is delighted to have delivered once again with its sale of Serenity Apartments at the Park in Montgomery, Alabama. This workforce housing property required a tremendous level of commitment by Elevation management to deliver on its promise to residents and investors, ” said Chris King, CEO of Elevation Financial Group. “I am proud that we turned over a full property to the new buyer and produced a strong profit for our investors, at a time when they need a small excellent news. To an investor community that has stood beside us faithfully, thank you for giving us the opportunity to serve you in excellent times and in terrible times. As Elevation was birthed during the fantastic recession, I have always believed that we have been equipped to do some of our best work during the toughest economic times.”
During the time of ownership, Elevation completely revitalized the community and made a number of value-add enhancements. One addition was Serenity Park, an expansive outdoor area for families and children. It was quickly recognized during the initial buy that the outdoor space where families and children spent time was deteriorating and unsafe. Making this area safe again was a priority, but Elevation took it a step further and added a large playground, picnic areas with canopies, a soccer field and walking track. Serenity Park provided a place for children to play and families to bbq, picnic and exercise.
Additional enhancements include the rehabilitation of over 75 units, exterior painting and landscaping, the installation of water conservation kits in all of the units and a leasing office renovation.
Serenity Apartments at the Park represents the fifth property sold for Fund V with one asset, Serenity Townhomes at Montgomery, still remaining in the portfolio.
The past six months have been very active for Elevation with four properties sold and nine apartment communities bought. The company also expanded into Virginia, Illinois and Indiana with the acquisition of multiple 55+ independent senior properties. In addition, Elevation recently closed on its seventh and largest fund, The Apollo Fund, which raised more than $43 million.

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TAMPA, FL – Preferred Apartment Communities announced its acquisition of Altis Wiregrass Ranch, a newly-constructed 392-unit Class A multifamily community located in Tampa, Florida.
Jeff Sherman, President of Multifamily said, “Despite the current near-term environment, our financial involvement in the development of this property since inception gives us a deep understanding of the positive long-term attributes of this best-in-class community and the growing market area around it.The opportunity to buy it came through a real estate loan investment that PAC made for the development of the property over two years ago and once again illustrates the imbedded value inherent in these loans.” Mr. Sherman added, “This acquisition demonstrates our commitment to our strategy of selectively adding newly constructed Class A multifamily communities to our portfolio, which we believe will translate into sustainable and growing cash flows.”
Altis is located in Wiregrass Ranch, a master plotted mixed-use community spanning over 5,000 acres with top rated schools, medical facilities including a hospital, destination shopping and dining venues. Mr. Sherman stated, “The continued growth in Wiregrass Ranch abounds; currently a 98,000 SF indoor sports facility and Marriott branded hotel are under construction behind Altis and recently, Raymond James submitted a preliminary site plot to Pasco County for their much anticipated satellite office expansion.” Mr. Sherman continued, “In addition to the exciting growth tale of Wiregrass Ranch, we were able to secure outstanding project level debt for this property.”
PAC bought Altis all cash, net of the full payment of our loan investment and all accrued interest. PAC executed a rate lock with Nationwide for a first mortgage loan bearing interest at a fixed rate of 2.90% per annum for a 10-year term that amortizes based on a 30-year schedule. PAC expects to close this loan with Nationwide during the second quarter of 2020. There will be no loan guaranties provided by PAC or our operating partnership.

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