Multifamily Investment to Expand into Secondary, Tertiary Markets in 2022

by Sarah Daniels


Surging payrolls, new household formations, growing barriers to homeownership and multifamily’s role as a hedge for inflation all helped fuel robust apartment fundamentals in 2021. With interest rates expected to rise in 2022, the question becomes: will the appetite for apartment investments remain strong for all types of investors and in which markets?

Hilary Provinse, executive vice president and head of mortgage banking at Berkadia, says she sees many reasons to be enthusiastic about the opportunities in multifamily markets this year. “Fannie Mae and Freddie Mac will continue to set the standard for multifamily lending; however, strong life company, bank and debt fund appetites will compete heavily again in 2022. They will fill the needs not met by the government-sponsored enterprises (GSEs) or HUD.”

When it comes to accelerating multifamily trends, Provinse sees an expansion in the scope of multifamily interest: “One of the trends we see accelerating (as a result of COVID) is increased investor demand in not only secondary markets, but even tertiary markets. This was a trend we had seen a decade ago, but now it’s on steroids.”

“Because people can work from wherever now and because of more flexible work arrangements…we’ve seen this willingness to live an hour to an hour and a half away from work. In tertiary markets, we are seeing much more significant investor demand investment in and possibly long-term sustainment (from a demand standpoint) in some of those markets.”

Watch Provinse’s interview to learn all about multifamily financing trends and capital strategies for 2022.

This video is posted as part of REBusinessOnline’s Finance Insight seriesClick here to subscribe to the Finance Insight newsletter, a four-part newsletter series, followed by video interviews delivered to your inbox in February.

You may also like