On paper multifamily fundamentals are fine. In reality the asset class is overshadowed by the uncertainty of the cost of debt, rising inflation and a potential recession that could cause rent growth to moderate. 

Not surprisingly, closing deals in this environment has been tough, especially with a bid-ask spread that has become a hindrance in negotiations, says Ari Abramson, vice president of Multifamily Acquisitions for Continental Realty Corp. 

"In the summer we thought the markets would stabilize and post Labor Day the floodgates would open for deals. That did not happen. Sellers have become hesitant about valuations and the 10-year Treasury has become very volatile. It is very hard to know where to lock a fixed interest rate for any type of debt instrument." 

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.