Capital Sources Eye More Multifamily Business This Year

Capital markets are open and ready to serve multifamily borrowers this year. According to a new report from Yardi Matrix, the apartment industry is continuing to cope with the challenges of the pandemic—like a decline in rent collections and waning demand in primary metros—but the availability of capital is not among them. This year, the capital markets will support transaction activity in multifamily.

In 2020, this was not the case. Transaction volume fell to $80 billion, down from $127.6 billion in 2019, and lenders took a pause to evaluate the new market conditions. Deal flow fell following the onset of the pandemic, but now, it has rebounded. For 2021, multifamily is once again considered a top investment asset class. Why? Multifamily continues to be in short supply, particularly among the renter-by-necessity and affordable housing segments. In addition, multifamily produces 4% to 6% dividend yields, better than both sovereign bonds and investment-grade corporate bonds, according to the Yardi Matrix report.