Deconstruct
The Short-Seller And The REIT: Inside Arbor Realty Trust's CLOs
Feb 19, 2024
The podcast delves into the challenges faced by Arbor Realty Trust due to issues with loans in CLOs, with insights from Vicerory Research. It also explores real estate controversies, risks in the industry, loan refinancing for property rehabilitation, and Arbor's unique borrower negotiation strategies.
29:14
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Quick takeaways
- Arbor Realty Trust faced challenges with rising delinquencies and potential overvaluation in multifamily bridge loans.
- Concerns arose over Arbor's risk exposure due to reliance on collateralized loan obligations with high LTV ratios.
Deep dives
Challenges for Arbor Realty Trust in Multifamily Lending
Arbor Realty Trust faced significant challenges in the first and second quarters of the year, which were predicted to be the most difficult part of the cycle. With attention from short seller Vicerory Research, concerns were raised about delinquencies in loans issued by Arbor, particularly to struggling multifamily syndicators. The floating rate nature of Arbor's bridge loans created risks in a changing interest rate environment, impacting the borrowers' ability to meet obligations. The company's exposure to multifamily residential bridge loans came under scrutiny for potential overvaluation in a challenging market.
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