Rents may be falling but fundamentally multifamily fundamentals are very strong. Widespread distress is highly unlikely to happen; indeed forecasts for the asset class' long-term growth are quite rosy.
But for investors eager to get a cost-effective foothold in this category or expand their holdings, here is an emerging opportunity: developers or owners that are highly-leveraged and unable to make debt payments as interest rates rise, according to Jahn Brodwin, senior managing director and co-leader of the Real Estate Solutions practice at FTI Consulting.
This group will need rescue capital – most likely mezzanine capital – to help them rebalance their capital stack, he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
