Alterra IOS has acquired over 300 sites nationwide, today announced the closing of $189 million in financing from Blackstone Mortgage Trust Inc.

Justin Horowitz of Cooper Horowitz worked with Alterra IOS Venture III to market and source the financing. The funding was secured for assets acquired in Alterra’s latest venture. Alterra has now secured over $1 billion in lender financing for the fund, which closed in May 2024 at $925 million in total commitments, exceeding the original fundraising goal of $750 million and reaching its hard cap.

The funding from Blackstone Mortgage Trust backs 49 IOS sites across 22 states, totaling approximately 235 usable acres. This financing comes on the heels of several significant transactions for Alterra in 2024, including the sale of an institutional-grade portfolio of 51 IOS assets to Peakstone Realty Trust in November for $490 million.

“We are thrilled to close our first financing with the Blackstone team and to add another leading institution to a growing list of capital providers supporting our IOS platform,” said Scott Whittle, Chief Financial Officer for Alterra IOS.

Dwight Mortgage Trust, the affiliate REIT of Dwight Capital, has provided a $148-million construction loan for Sutphin II, a planned 524-unit luxury high-rise apartment building in the Jamaica neighborhood of Queens. Steven Hersko of the SHB Group arranged the loan on behalf of the developer, a partnership led by Moshe Braver.

The development consists of one 24-story building that will feature 366 market-rate units, 158 affordable units ranging from one to three bedrooms and 7,750 square feet of ground-floor retail. The community will offer premium amenities, including a parking garage, rooftop space, gym and yoga studio, business center, game room, theater, resident lounge, children’s playroom, pet spa and library.

Sutphin II is located adjacent to the Jamaica Long Island Rail Road train station and within walking distance of multiple subway lines. Upon completion, the project qualifies for a 35-year 421-a tax abatement and Brownfield Redevelopment Tax Credits.

Delinquency rates for mortgages backed by commercial properties increased during the fourth quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest commercial real estate finance Loan Performance Survey. The share of loans that were delinquent increased for some property types, particularly office, lodging, retail and multifamily, but decreased for industrial properties.

Among capital sources, CMBS saw the highest loan delinquency rates at 5.3%. At the other end of the spectrum, loans from Fannie Mae and Freddie Mac saw a 0.6% delinquency rate.

“The delinquency rate for commercial mortgages increased during the final three months of 2024, with increases across most capital sources and property types,” said Mike Fratantoni, MBA’s SVP and chief economist. “The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy.”

Commercial mortgage delinquencies increased in the third quarter of 2024, according to the Mortgage Bankers Association’s (MBA) latest Commercial Delinquency Report. All lender types saw delinquencies rise during the quarter. 

Based on the unpaid principal balance (UPB) of loans, delinquency rates for each group at the end of Q3 were as follows: 

• Banks and thrifts (90 or more days delinquent or in non-accrual): 1.24%, an increase of 0.09 percentage points from Q2 2024; 

• Life company portfolios (60 or more days delinquent): 0.46%, up 0.03 percentage points from Q2; 

• Fannie Mae (60 or more days delinquent): 0.56%, up 0.12 percentage points from Q2; 

• Freddie Mac (60 or more days delinquent): 0.39%, up 0.01 percentage points from Q2; and 

• CMBS (30 or more days delinquent or in REO): 5.15%, up 0.33 percentage points from Q2. 

“The share of the balance of delinquent commercial mortgages increased for every major capital source during the third quarter of 2024,” said Jamie Woodwell, MBA’s head of commercial real estate research. “The increases varied by capital source and were driven by the particularities of each individual loan and property. Stresses differ by property type and subtype, geographic market and submarket, loan type and vintage, borrower type and more.” 

Dwight Mortgage Trust, the affiliate REIT of Dwight Capital, provided $58.8 million in bridge financing for Solis at Petrosa, a newly constructed 260-unit apartment complex in Bend, Oregon.

Proceeds from the loan will go towards refinancing the borrower’s existing construction debt and fund an operating reserve to facilitate lease-up. Lake Oswego-based McBride Capital brokered the transaction for a repeat Dwight client, Pahlisch Commercial.  Proceeds from the loan refinance the borrower’s existing construction debt and fund an operating reserve to facilitate lease-up. 

Situated on nearly 10 acres of land, the property consists of eight three-story buildings and one four-story building. Its amenities include a pool, a community lounge equipped with a full kitchen, a fitness room, and a golf simulator room. Solis at Petrosa is located directly opposite Pine Nursery Park, a sprawling 159-acre space offering a variety of recreational facilities such as sports fields, pickleball courts, fishing ponds, trails, and a dog park.

Don’t miss hearing the experts’ take on where the Phoenix & Scottsdale multifamily and single-family-rental markets are headed on the afternoon of Thursday, April 18. Register now to hear first-hand insights and forecasts from the regions CRE leaders in development, investment, ownership, lending, and more at Connect Phoenix Multifamily & Single-Family Build-to-Rent. Register today!

Securing a mortgage to buy a home has become more expensive than at any time since 2000, making people less likely to move and restricting the migration flows that have become more common during the pandemic.

The number of existing homes sold in the U.S. has fallen every month since February due in large part to spiking mortgage rates. The standard 30-year fixed mortgage rate started this year around 6% — already double the rate during the early part of the pandemic — and it has shot up over the last several months to reach 8% last week, a 23-year high. 

Those elevated rates are having wide-reaching negative implications for the economy. 

“Without the economic dynamism that comes with mobility — not only economic mobility but residential mobility that people also associate with their economic improvement — without that, it makes the economy sluggish,” National Association of Realtors Chief Economist Lawrence Yun told Bisnow. 

In September, existing home sales were down 15.4% year-over-year and 2% month-over-month, according to the National Association of Realtors. That sluggish volume causes ripples across the economy, economists said, as industries tied to home sales domino in conjunction with the slowdown. 

“There’s a huge echo effect,” Mortgage Bankers Association Executive Director Eddie Seilar said. “You buy a house, you often renovate it … people who produce carpets, people who produce furniture, appliance manufacturers [are impacted]. So it’s got this huge ripple effect across the economy, in many ways.” 

Yun also pointed to these sectors as vulnerable to the impact of rising mortgage rates, and he said the overall housing industry comprises 15% of the U.S. economy. 

“All these parts are diminished,” Yun said. “So the economy will weaken.” 

Rates were at record lows during the first two years of the pandemic when the federal government dropped its benchmark rate to zero and funneled dollars into mortgage-backed securities. People used those low rates, along with their remote work policies and newfound appreciation of the outdoors, as an impetus to move to other parts of the country. 

But less than two years later, a swift uptick in mortgage rates, fueled by the Federal Reserve’s hikes, has owners hesitant to move, as they want to hold on to those cheaper mortgages. 

“They’re not willing to give up 3% mortgage rates when the market rate today is 7%,” Chris Porter, the chief demographer at John Burns Research and Consulting, told Bisnow last month. “We’re seeing slower rates of migration in real time simply because more people have moved in recent years and are adjusted to the cost of living.”

As owners choose to stay in their homes rather than trade in their rates, companies are choosing to remain flexible in their return-to-work policies, to the benefit of those who may have moved during the pandemic and are now priced out of moving back, MBA’s Seilar said.

He pointed to news that Boston Consulting Group rented a coworking space in October 2022 for employees who had moved to the Raleigh-Durham area earlier in the pandemic, rather than making them return to one of the company’s main offices. 

“These companies are taking offices in shared office space like WeWork for a few days a week, having people come together, but they’re not forcing mass moves,” Seilar said.

A lack of affordable options in many metro areas is also causing those buyers who are choosing to purchase properties to relocate to areas of the country with cheaper real estate. And companies are following suit. 

“When we look at the jobs numbers, which are directly correlated with where the companies are expanding or relocating, we see job growth essentially happening in the Southern states … and in the Rocky Mountain states,” Yun said, referring to job growth numbers in states like Florida, Georgia, the Carolinas, Texas, Colorado, Utah and Idaho. 

“These are the regions where companies appear to be relocating or companies are expanding,” he said. 

Meanwhile, would-be first-time buyers who are now shut out of purchasing a home due to the inflated mortgage rates will need to continue to rent, fueling the multifamily sector.

“Renters are forced to lease longer, renew their leases, and consequently, that is boosting the overall rental demand,” Yun said. “Charlotte, Omaha, Dallas, you see a construction crane, probably they’re building apartments.”

In response to the stalled home sales market and the increased demand for apartments, some developers have launched new expansions in the build-to-rent market, such as American Real Estate Partners and Foulger-Pratt.

“You’ve got move-up buyers, who would traditionally go from apartments into townhomes or single families … who now can’t afford to go buy these townhouses,” AREP President Brian Katz told Bisnow in August. 

These economic implications could become more pronounced the longer rates remain high, and Yun and Seiler said they expect mortgage rates to remain above 6% until at least the end of 2024.

“Until mortgage rates [aren’t] stuck at this level, then expect sluggish conditions — economy, home sales,” Yun said. “But if the mortgage rate begins to go down sometime next year, then we’ll begin to see the increase in dynamism for the country.”