A faint pulse in the delinquency data can stir seasoned investors to attention—or elicit a shrug. This summer, a minute increase in Class C multifamily delinquencies, measured as a “fraction of a percent,” has tested that calculus at Cushman & Wakefield. Sam Tenenbaum, head of multifamily insights at the firm, is quick to clarify the scale of this movement.
“The only place that I’ve seen an inkling of hint of stress is there has been a very minor uptick in the delinquency in class C, and when I say minor uptick, we’re talking about a fraction of a percent. And for a two month time frame, it really is likely just a blip,” Tenenbaum said, referring to C&W’s managed portfolio in a recent corporate podcast.
For institutional owners and operators managing at scale, parsing these small shifts is a core skill. Tenenbaum frames the question in starkly objective terms:
“It was to the point where I thought the data was really just noise, I’m more inclined to believe it’s noise in the data, rather than [an] underlying trend.” According to his assessment, Cushman & Wakefield views these fractional increases not as an immediate concern but as routine statistical variation—a signal to monitor, not to sound the alarm.
Yet the process behind these judgments is anything but simplistic. The firm’s proprietary management of approximately 170,000 units nationwide provides its team with first-mover access to portfolio-level data, including lease trade-outs, reasons for move-outs, and monthly delinquency rates. These metrics are regarded as “leading indicators for where the market’s headed, not just where the market’s been over the last 12 months,” said Tenenbaum.
This depth of internal data, gathered exclusively from managed assets, enables Cushman & Wakefield to spot the faintest signs of change, months in advance of public market reporting.
The current reading, though, does not prompt a shift in risk posture. Delinquency rates, at present, are “back to pre-pandemic levels,” and resident move-out reasons tied to financial stress are registering at the lowest point since Tenenbaum joined over three years ago. As supply pressures from new construction start to abate, the market may indeed be inflecting toward greater stability.
“At this point, it may not be all systems go, but it’s a lot better than where we’ve been over the past few years, when it’s been a little bit touch and go, with respect to where the economy is headed, where the industry is headed, all of that supply pressure that we’ve been dealing with for the past few years on construction side, starting to abate,” Tenenbaum observed.
Each quarter, Cushman & Wakefield publicly releases a report on its insights page, designed to flag any new areas of concern before they show up in broader market analyses.
“If we start to see a little bit more, we’ll release that data as part of that article that we write every quarter, where we’ll detail, hey, this is an area in which we’re a little bit concerned or what have you,” Tenenbaum added.
Risk management, in this context, is a process of disciplined early detection rather than hurried reaction. For Class C assets—often the most sensitive to broader economic tremors—a small statistical blip can prompt a round of re-examination, but not a rush to action. For now, the consensus at Cushman & Wakefield is clear: fractional upticks in Class C delinquency are, at least this quarter, more likely to be noise than a warning.
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