Crystal Asset falls behind on $49M loan tied to Moreno Valley apartments

212-unit property doesn’t generate enough income to service floating-rate debt

Arbor Realty Trust's Ivan Kaufman and 21550 Box Springs Road (Getty, Arbor Realty Trust,. vistaspringsapartment)
Arbor Realty Trust's Ivan Kaufman and 21550 Box Springs Road (Getty, Arbor Realty Trust,. vistaspringsapartment)

Crystal Asset Management, the Beverly Hills-based apartment owner run by Sol Rabin, is delinquent on a $49 million loan tied to a multifamily property in Riverside County, as rising interest rates have squeezed profits. 

The firm is 30 days late on the loan, which was originated by Arbor Realty Trust and then packaged into a collateralized loan obligation pool, according to data from Trepp. 

The loan is tied to Vista Springs Apartments, a 212-unit complex at 21550 Box Springs Road in Moreno Valley, Trepp data shows. The debt has not been sent to special servicing and it’s unclear whether the borrower and lender are in negotiations to work out the loan. 

Crystal Asset Management did not respond to a request for comment.

Though Crystal bought the property for $39.5 million in 2019, records show, the firm scored a $48.7 million loan tied to the property in December 2021, at a time when interest rates were at record lows. 

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The loan is floating-rate, meaning as the Federal Reserve hiked rates, Crystal’s monthly mortgage bills hiked up, too. 

When the loan was originated, Crystal was paying about 4.2 percent in interest on the loan. The current rate on the loan is 9.5 percent, according to Trepp data. It’s unclear whether Crystal had a rate cap, which hedges against rising rates on the debt.

Arbor Realty Trust, a frequent lender of floating-rate bridge loans such as Crystal’s, modified $1.9 billion in loans in the first quarter, in an effort to stave off defaults en masse. Many borrowers have landed in the same position as Crystal — incomes at the property are not enough to make monthly mortgage payments. 

At the end of March, the property was making about 70 percent of what was needed to service the debt, according to Trepp data. When Arbor first gave out the loan, the property was making 173 percent of its debt obligations. 

Crystal has bought and sold more than 5,500 apartments since its formation in 2004, according to websites for the firm and Terabon Real Estate, a developer also founded by Rabin.