Northeast

We’re already well into the first quarter of 2019 and with that comes the many industry events, including NMHC’s Apartment Strategies Conference and MBA’s CREF 2019. Before the year — and conference season — gets fully underway, we want to share our perspective on the top financing and investing trends that may impact your multifamily investment opportunities in the coming months. 1. New Construction Generates Sales, Financing Opportunities Multifamily development has been robust in recent years, reaching a peak in 2018. About 280,000 apartment units were delivered in 2018, and more than 1.1 million units have been delivered during the past five years. Only about 25 percent of these units have sold at this point. Developers are expected to either place permanent financing on projects or implement exit strategies by increasingly bringing stabilized projects to market. 2. Value-Add Remains Popular, Profitable Investors looking to steer clear of some of the aggressive pricing for new properties will continue to target value-add opportunities. Value-add strategies that can be executed in short time frames of about 18 months will appeal to investors and lenders as vacancies tighten and rents rise in nearly every major market in the country. 3. Interest Rates May Plateau …

Green bonds have been around since 2007, but they only really started to gain traction in 2014 when about $37 billion worth of bonds were issued in the U.S. That number jumped to $45.4 billion last year, according to Bloomberg New Energy Finance (BNEF). These financing vehicles, which tout environmental and social good, can be big business. Fannie Mae accounted for much of these green mortgage-backed securities (Green MBS) with $19.8 billion contributed in 2018. These loans center on assets that have achieved green certification or those that can reduce their energy and water consumption. “Multifamily had another outstanding year in 2018, thanks to our lenders,” says Rob Levin, senior vice president for multifamily customer engagement at Fannie Mae. “Together, we supported all market segments, bringing liquidity to the market while building a balanced portfolio that reflects our strategy with strong credit quality and mission-rich business.” Getting With The Program Lenders are taking advantage of the government-sponsored entities’ (GSEs) sustainability programs at an accelerated pace. Walker & Dunlop structured $392.3 million in green financing for three multifamily properties in Southern California in June 2018. Class A communities the Medici and the Orsini I in downtown Los Angeles were financed through …