Debt capital is flowing across the multifamily sector, but equity is proving far harder to secure—creating a bottleneck that continues to slow transactions.
That disconnect took center stage at GlobeSt.'s Multifamily Owners Summit in Tampa, where panelists said a lack of capital does not constrain today's market, but rather a shrinking pool of deals that can satisfy increasingly selective investors. Even as lenders compete aggressively to finance deals, equity partners are applying stricter underwriting standards and demanding clearer paths to returns.
During the session, "The Investment Landscape: Dispositions, Acquisitions & the Bottom Line," speakers described a market where capital stacks are more difficult to complete, particularly on the equity side.
"There is so much capital out there today waiting to be recycled," said Garrett Karam, chief investment officer at EMBREY. "Until transaction volume starts flowing, which I think will be 2027, things will be tight."
Karam emphasized that while debt is widely available, equity is the gating factor in getting deals done.
"It's hard to get deals done, but it's hard to get equity across the finish line," he said, noting that lenders currently have numerous capital sources competing for business.
That imbalance reflects broader uncertainty around pricing and returns, which continues to stall investment decisions. Even so, Karam pointed to strong long-term fundamentals for multifamily, with some investors continuing to deploy capital selectively.
"There are people going all in on our space," he said. "There are a lot of reasons to understand and believe that there will be great returns over the next three to four years."
Still, those investors are setting a much higher bar. Deals must stand out not only on fundamentals but also on how clearly they articulate a path to performance.
"Every story has to be special," Karam said. "Even the special stories have to be special, otherwise investors will say no."
Brian Soss, managing director of acquisitions at RangeWater Real Estate, said that the higher bar is contributing to a growing gap between capital raised and capital deployed.
"People want to put money out and have a lot of capital raised," Soss said. "They want to find unicorn deals and they want groups like us to go find them. A lot of times, though, you find those deals and they find a way to kill it."
As equity becomes more difficult to secure, operators are being forced to sharpen how they present opportunities. Traditional value-add strategies are no longer sufficient to win over investors in a crowded and competitive environment.
"You have to learn how to storytell, and it has to be more than the traditional, 'we're going to change cabinets and flooring,'" he said.
Competition is also intensifying as investors move across the risk spectrum in search of yield. According to Soss, buyers that historically avoided older assets are now actively pursuing them, adding pressure on traditional value-add operators already struggling to secure equity.
"It is pushing you further down the risk spectrum," he said.
While most of the market is grappling with these constraints, some segments are seeing fewer obstacles. Neal Drobenare, senior vice president of acquisition and development at The NHP Foundation, said affordable housing continues to attract strong demand, particularly in tax-exempt financing structures where capital remains plentiful.
"We have had five times the number of buyers than bonds available in a recent deal," Drobenare said.
That demand has allowed NHP to move quickly, even as conventional multifamily transactions face delays tied to equity sourcing.
"We have been able to execute and get deals done in under three months and we haven't had any problems going to the market and getting that capital," he said.
Still, for most sponsors, access to capital is only part of the equation. Whether a deal gets financed increasingly depends on how well it aligns with investor expectations around risk, returns and differentiation.
"Capital is still out there, but it is still very difficult to get some deals capitalized," said Chip Wooten, senior vice president of debt capital management and asset sales at Hillpointe. "If you have a unique offering, it is easier."
Wooten said Hillpointe has leaned more heavily on private capital, particularly given its focus on secondary and tertiary markets and smaller deal sizes. Institutional investors remain active, but many are still recalibrating return thresholds, further slowing execution.
"Institutional investors are still showing up on the bid sheet," he said. "But they are still determining where the returns need to be."
Across the panel, the message was consistent: debt may be readily available, but equity discipline is dictating which deals move forward. Until pricing stabilizes and more opportunities meet those stricter criteria, transaction volume is likely to remain constrained.
Check back with GlobeSt.com for more from this panel and event.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.