Property Type

— By Ben Galles, senior vice president of CBRE — Interest rates have been the biggest factor for Reno’s multifamily market this year, reaching some of the highest levels seen in a long time. The market for multifamily properties in Northern Nevada has been slow to adjust to the new lending environment, with sellers unwilling to price assets at a rate of return that would provide most buyers with positive leverage. In other words, the interest rate on loans used to purchase many of the current listings is higher than said property’s cap rate. Multifamily sales volume in Northern Nevada is down 14 percent compared to the same time last year. One of the major drivers for the drop in sales volume is that only three deals have secured bank debt, with the average loan to value (LTV) of those loans being roughly 48 percent. While cash transactions have represented more than 58 percent of the transactions, a large percentage of deals have involved owner financing. Some owners who needed to move their assets over the past 12 months found that offering below-market interest rate owner financing was a significant selling point. Many of the deals that closed with owner …