Multifamily distress continues to simmer. A recent announcement by Open Door Capital stated that one investment will be a total loss, and there are rumors that S2 Capital’s roughly 9,000-unit REIT may lose 60 to 75 percent of investor equity. One broker recently told Tack that about half of their valuations this year were of distressed properties.

Many expected a wave of distressed opportunities like the global financial crisis when interest rates rose rapidly in 2022. That mostly did not happen outside of a few high-profile examples and one-off deals, including Tack’s acquisition of the Gardens at Manchester. Owners were able to extend loans and adopted a survive-until-2025 mentality, hoping rates and values would recover. As a result, only about 3 percent of transactions have been distressed, compared with roughly 20 percent during the financial crisis.

Now, mid-2026, treasury yields have risen and expectations are increasing for additional rate hikes. Brokers are saying lenders are running out of patience and owners are running out of runway. Distress may never boil over the way it did in the financial crisis, but expect it to keep simmering. With a well-performing portfolio, Tack is positioned to take advantage of distressed opportunities, much like the Gardens at Manchester last year.

On May 19th, Tack closed on a two-property portfolio in Hopewell, VA, its second acquisition in thirty days. Butterworth and City Point are historic tax-credit renovation properties in Hopewell’s downtown historic district, among the nicest in the market. Both are fully occupied and in good condition, with most units featuring hardwood floors, in-unit laundry, stainless appliances, and strong natural light.

The acquisition was financed with a Fannie Mae loan, where the rate and proceeds move daily with treasury yields until a rate lock. Tack underwrites rates conservatively and locks quickly. For this deal, Tack assumed yields would rise 0.3 percent and worked fast to secure loan approval. The result was a rate only 0.05 percent above the projected rate, despite a 0.69 percent increase in the 5-year treasury between signing and closing. Had Tack waited, the rate would have risen another 0.25 percent, cutting loan proceeds and returns. Another reminder to be careful timing the market.