The fading allure of city-living could deal a massive blow to US mortgage bonds.
Data company Trepp has identified 50 so-called multifamily loans with a balance of $1.5bn where the occupancy rate of buildings dropped by 15 percentage points last year.
“Is this the tip of the iceberg?” asks Manus Clancy, head of research at Trepp. “Our thought is that the number of loans struggling with low occupancy levels has to go up.”
He argues that it shows early signs of strain on the $1.2tn market in bonds backed by mortgages on apartment blocks.
