September 11, 2020
The start of the 2021-2021 academic year has been a back-to-campus scene like no other, replete with “temperature checks, signs at every corner reminding students to follow physical distancing and proper hand-washing protocols, as well as new rules forbidding entry by visitors on campus as a means to control crowding,” writes Trepp’s Catherine Liu. It’s been a challenging time for education leaders and student housing operators alike.
“Beyond the hardest-hit retail and lodging CRE segments, specialized housing accommodations like student housing have been under immense financial pressure with concerns about safety displacing students out of on-campus facilities,” Liu writes.
She notes that in Trepp’s database, 1,996 Fannie Mae, Freddie Mac, and private-label CMBS properties backing an allocated loan balance of $15.1 billion have been flagged for having approved, processed, or requested forbearances due to COVID-19.
“Among the multifamily subtypes, student housing has had higher relief needs as $1.6 billion across 101 properties from this tally were identified as having requested or granted COVID-19 financial assistance,” writes Liu.
Student housing accounted for about 10.7% of the total forbearance request volume, although it comprises only 4% of the total $680 billion multifamily debt universe from these lending sources, according to Trepp data.
In terms of the rate of requests by subtype, nearly 6% of the total $27.1 billion in student housing Fannie, Freddie, and CMBS loans were flagged for needing forbearances, which compares to a 2.06% request rate for all other multifamily subtypes.
Looking at the $4.7-billion non-agency CMBS space, Liu writes that the overall 30-days-plus delinquency rate for student housing loans ticked up to an all-time high of 13.66% in July, above the 2.19% reading for all other multifamily subtypes. That same month, the student housing special servicing rate reached a record 12.15%, above the 1.09% rate for all other multifamily segments.
By major metropolitan area, Philadelphia, PA-NJ-DE-MD; Tucson, AZ; College Station-Bryan, TX, Tallahassee, FL; and Greenville, SC were among those seeing the highest balances of student housing loans with financial relief requests.
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