Arbor Realty Trust rose from its roots on Long Island, N.Y., to become a property-finance powerhouse. As a major lender to Sunbelt apartment buyers, it helped fuel a speculative real estate frenzy in 2021 and early 2022, the Wall Street Journal reported. That boom ended when interest rates shot up, imperiling borrowers’ ability to make payments on Arbor’s loans that were often repackaged into bonds and sold to investors. Now, the company is contending with a wave of property owners struggling to pay interest on their floating-rate debt. Borrowers of a quarter of Arbor’s securitized debt were late on debt payments as of mid-January, according to the data company CRED iQ, which analyzed figures from the bonds’ trustee. Borrowers of around 9% of the debt were 30 or more days late. Most borrowers who were late on January payments eventually paid, an Arbor spokesman said, and he said 5.8% of Arbor’s securitized debt payments are still not current on January payments.
