The U.S. multifamily market has slowed — in some markets, considerably — since its Covid-19 pandemic heyday, resulting in questions about whether billions in debt tied to the sector could be in trouble.
An estimated $669 billion in multifamily loans are expected to mature between 2024 and 2026, according to an analysis by Newmark Group Inc. (Nasdaq: NMRK). Many of the loans tied to the multifamily sector that are set to mature soon were underwritten in a much lower interest-rate environment and at a time when apartments were seeing double-digit-percentage rent gains annually.
Lending to multifamily also has slowed, not unlike other commercial real estate sectors. In the first quarter, multifamily debt originations declined to the lowest level since 2015, according to Newmark.
Newmark executives weren’t available to discuss the multifamily financing market for a phone interview by deadline. But in an email, Sharon Karaffa, president of multifamily debt and structured finance for Newmark’s multifamily capital markets division, said while there are fewer lenders active today than in 2021 and 2022, creative financing is available.
