The Rent Roll with Jay Parsons EP#69 Michael Comparato | Where's All The Distress?
Jan 29, 2026
Michael Comparato, president and head of commercial real estate at Benefit Street Partners, brings banking roots and multifamily lending expertise. He discusses why distress is concentrated in older, lower-quality apartments. Short timelines on who will buy Class C assets, how private credit is reshaping lending, and what might finally push larger waves of distressed sales.
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Bifurcated Market: A/B Versus C Stocks
- Sales volumes remain well below peak and trading favors newer, high-quality assets, keeping cap rates compressed there.
- Class C and older vintage assets still lack a clearing price and may drive future distress.
Where Distress Is Concentrated
- TREP's watch list shows distress concentrated in specific MSAs like Austin, Jacksonville, and Houston.
- Distress is mainly in older, value-add deals bought at the peak with short-term floating debt.
Thin Cap-Rate Spread Limits Buyers
- Cap rate spreads between Class A and Class C have only widened modestly (100–150 bps), leaving little margin for risky buyers.
- That thin spread makes many Class C deals unattractive unless prices move much lower.