Federal immigration enforcement is adding a new wrinkle to the distress facing one of the country’s largest multifamily bridge lenders.
Arbor Realty Trust is grappling with a growing pile of troubled loans, and CEO Ivan Kaufman said stepped-up ICE activity in key Sun Belt markets is compounding the pain. Bisnow reported that apartment properties the real estate investment trust has taken back through foreclosure are just 45 percent occupied on average, excluding two properties offline for renovations, dragging heavily on earnings.
“You’re seeing a lot of ICE raids in those areas,” Kaufman said on the company’s earnings call, pointing to Houston as the hardest hit market, along with San Antonio, Dallas, Atlanta and parts of Florida. In some cases, he said, properties that were 90 percent occupied fell to 65 percent or 70 percent “the next day.”
Houston has been “very adversely” affected by immigration policy swings from both administrations, Kaufman said, arguing that prior federal use of nearby immigration centers also damaged surrounding properties.
The numbers demonstrate how quickly Arbor’s balance sheet has shifted. The Long Island, New York-based real estate investment trust ended 2025 with 15 multifamily Real Estate Owned properties — those it repossessed after failed foreclosure auctions. It foreclosed on 21 loans in 2025, up from six the year before.
Loan delinquencies hit $570 million at year-end, while REO assets swelled to $500 million, nearly triple the $177 million on its books at the end of 2024. Chief Financial Officer Paul Elenio said some of those properties are generating negative net operating income, as the firm works to stabilize them.
Arbor sold five REO assets in 2025 and expects to shrink its REO balance to between $250 million and $300 million by the end of 2026, even as it anticipates adding another $100 million to $200 million in newly repossessed properties along the way, according to the outlet.
The drag is evident in earnings, as the trust’s net interest income fell to $55.7 million in the fourth quarter, down from $82.9 million a year earlier.
The lender might also be operating under a cloud. In July 2024, Bloomberg reported that the U.S. Department of Justice and the FBI launched an investigation into Arbor’s lending practices, but it is unclear whether those investigations are still ongoing.
— Eric Weilbacher
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