NYC’s biggest multifamily lender says rent collections are holding steady

New York Community Bank reported $3.7B in deferred multifamily loans

New York /
Jul.July 29, 2020 01:05 PM
NY Community Bank president Joseph Ficalora

NY Community Bank president Joseph Ficalora

New York City’s biggest multifamily lender said today that rent collections in its $31.6 billion multifamily portfolio have remained strong.

During New York Community Bank’s second quarter earnings call, executives reported that multifamily rent collections have been 85 to 90 percent of normal levels. The bank also reported a slight increase in net income, up 5 percent from the first quarter of 2020 to $105.3 million.

NYCB was one of the first lenders to craft a forbearance program for landlords — and it is offering a six-month deferral period. Other banks have opted for three-month deferral periods with the option to renew later.

Offering that much time for borrowers to restart full payments has benefited the bank’s balance sheet, said CEO Joseph Ficalora.

“We have a higher rate of interest on every dollar we defer,” said Ficalora. “When you take massive amounts of money that are being deferred at rates we could not get at the marketplace, it’s attractive to the bottom line.”

As of June 30, the bank had $3.7 billion in deferred multifamily loans. Most of those agreements will lapse at the end of the third quarter, he said.

The economic distress caused by the pandemic may also provide opportunities for NYCB’s borrowers to purchase multifamily properties in foreclosure, Ficalora said.

NYCB highlighted the performance of its rent-regulated assets, which accounts for $19 billion, or 60 percent, of the bank’s overall portfolio.

“Rent rolls are very stable in buildings where tenants have rent control or rent stabilization, because they want to maintain their apartment,” said Ficalora. “We have a very high concentration of tenants inclined to stay in the buildings they’re in because they have a huge economic advantage.”

The account differs from other banks, landlords and trade associations, which have reported that collections at rent-regulated properties were lower than those in market-rate apartments, which tend to have more affluent tenants.

The bank’s officials also reported that its multifamily property borrowers did not benefit from the federal Paycheck Protection Program because landlords were not eligible. In fact, many large multifamily property owners did receive such loans through affiliated entities and property management subsidiaries.


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)

Real estate stocks push up this week as U.S.-China trade tensions ease

Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case

Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
One Madison Avenue and Marc Holliday (Photos via SL Green)

SL Green snags $1.25B construction loan for One Madison Avenue

SL Green snags $1.25B construction loan for One Madison Avenue
11 Penn Plaza and 120 Wall Street (VNO, Wikipedia Commons)

Manhattan’s top real estate loans post second best month since March

Manhattan’s top real estate loans post second best month since March
Square Mile Capital CEO Craig Solomon and The Real Deal's Hiten Samtani

WATCH: “It’s going to take longer, and it’s going to cost more”: Craig Solomon on the real estate capital stack

WATCH: “It’s going to take longer, and it’s going to cost more”: Craig Solomon on the real estate capital stack
OneTitle's Seth Brown (iStock)

OneTitle set out to change the title industry. Now it’s out of business

OneTitle set out to change the title industry. Now it’s out of business
The Scribner Building at at 597 Fifth Avenue and Joe Sitt of Thor Equities (Wikipedia Commons)

Thor delinquent on $105M loan at 597 Fifth

Thor delinquent on $105M loan at 597 Fifth
Pension fund investors are seeking to take cash out of real estate funds as property values fall, like at Water Tower Place in Chicago (Photo via iStock; Wikipedia Commons)

Core real estate funds delay investors from cashing out

Core real estate funds delay investors from cashing out
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...