Multifamily lender says loans in good shape, not endangered by rent law

Despite a sluggish quarter of loan growth, New York Community Bank, the state’s largest multifamily lender, assured investors Wednesday that its heavily rent-regulated portfolio is well-insulated against the state’s rent laws.

The bank’s total loans, about three-quarters of which are on multifamily properties, ticked up about 1 percent to $43.7 billion on an annualized basis. The increase in the second quarter had been 4 percent.

CEO Thomas Cangemi called the growth “modest,” but assured that the bank’s multifamily lending was not to blame. Multifamily loans, in fact, repeated their second-quarter performance, jumping 4 percent on an annualized basis, quarter over quarter.

Declines in the firm’s other segments, the largest of which is commercial real estate, offset multifamily’s growth, Cangemi said.

Read more

New York

NYC’s largest multifamily lender says rent collections are at pre-pandemic levels

New York

Dramatic reversal buoys city’s biggest multifamily bank lender

In an investor presentation that accompanied the third-quarter results, NYCB laid out the health of its rent-regulated portfolio on a slide entitled: “Our multifamily portfolio is well insulated against recent change in the rent regulation laws.”

The slides specified that $19.2 billion or 58 percent of the firms’ multifamily portfolio is subject to the state’s rent stabilization law; however, the weighted-average, loan-to-value ratio on that portion of the portfolio is 55 percent, already low-risk, and about 3 percentage points lower than its overall multifamily portfolio.

Deferrals, sky high at $6.1 billion a year ago, have fallen significantly since then. In the third quarter they dropped another 9 percent, to $914 million, from the previous quarter. Full-payment referrals stayed steady at zero.

One problem borrower, whom the CEO did not identify, did cause the total of loans 30 to 89 days past due to surge to $447 million, more than twice as much as in the second quarter.

Cangemi said the borrower holds several Manhattan multifamily and mixed-use properties. He assured analysts that all the delinquencies are in the 30-day bucket and that the bank is working with the borrower, who has taken advantage of the CARES Act loan modification program.

“We do not expect to incur any losses on this relationship,” he added.

New York Community Bank underscored that the Manhattan residential real estate market is “on the path to normalization,” particularly within its segment — non-luxury, rent-regulated multifamily.

“We’re seeing a supply-and-demand situation where there’s not enough supply and tremendous demand on the housing side, so we feel highly confident,” Cangemi said.

In the months after the pandemic struck in early 2020, reports emerged of vacancies rising among New York City’s 900,000-plus rent-stabilized units, which normally would be immediately filled by tenants. But the greater worry among owners of rent-stabilized apartments remained the 2019 law that severely limited rent increases for those units and, unlike previous iterations, has no expiration date.