Detroit, Chicago and Denver have the highest risk scores among the top 25 metro areas for maturing multifamily loans, Kroll Bond Rating Agency (KBRA) said in a new report. KBRA weighed apartment supply and demand metrics from several sources to derive a risk scale between 1 and 25 for each metric, with one being the most favorable and 25 the worst. 

“In 2024 and 2025, 8.6% of multifamily’s principal balance for the largest 25 MSAs is scheduled to mature ($15.9 billion),” KBTA reported. However, “the percentage of loans maturing in the period can vary meaningfully by MSA. Maturing loans in MSAs with high risk scores could face greater refinancing challenges relative to those with lower scores.” 

For each of the three highest-risk metro areas, low employment growth was a factor, KBRA reported. Detroit and Chicago also exhibited negative population growth along with a relatively higher Home Ownership Affordability Monitor (HOAM) Index, as measured by the Federal Reserve Bank of Atlanta. Denver’s high risk score stemmed mainly from supply issues, while its vacancy rate (8.8%) and percentage of inventory under construction (11.3%) are both higher than the national average. 

At the other end of the spectrum was Las Vegas, which had the lowest risk score, albeit only one-third better than the next two lowest—Houston and San Diego, which had the same score (48).  

Las Vegas benefited mainly from its demand metrics, including current and forecast strong employment and population growth, as well as a favorable HOAM ranking. Houston also benefited from positive employment and population growth, while San Diego, meanwhile, had more positive supply metrics. 

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