- Texas ICE raids are a key factor in reduced occupancy at Arbor Realty Trust’s multifamily REO assets.
- The lender’s average occupancy rate at repossessed properties has fallen to 45%.
- Arbor’s REO asset balance rose to $500M at year end, with $570M in loan delinquencies.
- The REIT aims to resolve nonperforming assets and cut REO assets to $250M-$300M by late 2026.
Occupancy Hit by Enforcement Actions
Bisnow reports that multifamily lender Arbor Realty Trust is seeing major occupancy losses at apartments it has acquired. The declines appear strongest in Texas after a wave of ICE raids.
CEO Ivan Kaufman said federal immigration enforcement pushed occupancy at foreclosed properties down to 45%. The steepest drops occurred in Houston, Dallas, San Antonio, Atlanta, and several Florida markets.
Rising Distress and Asset Challenges
The multifamily lender’s portfolio distress accelerated as interest rates surged, pushing REO assets from $177M at the end of 2024 to $500M by late 2025. Loan delinquencies also climbed to $570M. Arbor ended 2025 with 15 multifamily REO assets, up from six foreclosures the year before. Some properties now generate negative NOI as the REIT works to stabilize operations. Meanwhile, immigration enforcement has also disrupted Texas construction activity, further complicating housing supply and workforce stability in key markets.
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REIT Response and Forward Strategy
While earnings have suffered, Arbor’s leadership remains optimistic about progress on resolving nonperforming multifamily assets. The company sold five REOs in 2025 and targets a reduction of its REO balance to $250M–$300M by the end of 2026, even after accounting for potential new additions. CFO Paul Elenio stressed that stabilization efforts are ongoing, with hopes pinned on improved occupancy rates and future income growth.
What’s Next
Despite the ongoing pressures from immigration enforcement and financial distress, Arbor beat analyst expectations in the fourth quarter. The REIT’s net interest income dropped to $55.7M for Q4 2025, but its stock rose 9% on the news. The company continues to work towards resolving troubled multifamily assets amidst a backdrop of governmental investigation into its lending activities.
