The pipeline for multifamily development has slowed due to continued challenges of higher interest rates and difficulty securing funding, and that includes filings of permits
Modifications on commercial real estate-related collateralized loan obligations spiked in the second quarter to $4B as more property owners sought refuge from encroaching maturity dates and rising interest rates. That figure is a 300% increase from the first quarter
Insurance now accounts for more than 8% of an owner’s quarterly per-unit operating expenses, nearly double the share from five years ago.
While the nation still faces a housing shortage not set to alleviate in the near term, a thinning construction pipeline could help stabilize the multifamily sector.
The battle between renting and owning is intuitive. If renting is significantly cheaper than owning a home, more of the population will gravitate towards renting. If homeownership is only moderately more costly than renting, people will be more inclined to pursue ownership.
Half of the debt outstanding in the commercial real estate world, $2.0 trillion, is to multifamily properties. There’s no crisis in multifamily whatsoever today. Period. So, when headlines say there’s a crisis in commercial real estate debt, half of that debt is in multifamily.