Ladder Capital Finance Holdings LLLP

Multifamily loans have also come under strain owing to slowing rent growth and high interest rates. A rise in troubled multifamily loans could exacerbate asset quality issues as Ladder and most of its peers have been increasing their exposure to multifamily since 2020 as an offset against office exposure. $1.2 billion of unrestricted cash (23% of total assets), $324 million available under its revolving credit facility, and About $1.8 billion of unencumbered investment assets (including $354 million of unencumbered liquid securities, which are mostly 'AAA' rated or government agency backed). Similar to peers, we expect Ladder will continue to prioritize liquidity over loan originations in 2024. The positive outlook indicates our expectation that, despite challenging conditions in CRE markets that

...We expect Ladder's asset quality could come under stress as higher-for-longer interest rates create challenges for commercial real estate (CRE) borrowers over the next few years. Higher-for-longer interest rates are weighing on CRE asset valuations by pushing up cap rates. We expect valuations to drop further in 2024, but they could stabilize if the Fed cuts rates in late 2024. Reduced valuations in the office sector have been much steeper than average for other property types given hybrid work and slowing job growth. Ladder has about 31% exposure to office. Multifamily loans have also come under strain owing to slowing rent growth and high interest rates. A rise in troubled multifamily loans could exacerbate asset quality issues as Ladder and most of its peers have been increasing their exposure to multifamily since 2020 as an offset against office exposure....

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