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Multifamily Syndicators Face CRE Debt Exposure

The same low-cost floating rate loans that made these deals work are now the problem.

When fighting the potential economic collapse of the pandemic turned into a zero interest rate policy, the result fanned commercial real estate development in all ways, shapes, and forms. One of them was multifamily syndicators, according to Trepp. “[M]ultifamily syndicators increased their rate of acquisitions considerably, often with a value-add strategy,” wrote author Emily Yue.

She continued: “These syndicators frequently relied on floating rate loans at low-interest rates with the hope that these properties would stabilize quickly after renovations were made and that rents would increase in a market with supply-and-demand dynamics leaning in their favor.”

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Erik Sherman

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