Small Balance Multifamily Investment Snapshot — Q1 2019
Adjusted estimates of 2018 lending volume of new multifamily loans with original balances between $1 million and $6 million jumped to $53.1 billion, the highest level of activity in Chandan Economics’ post-financial crisis estimates. Initial readings for Q1 2019 totaled an annualized $48.7 billion. This would represent a modest pullback.
National average cap rates for small loan-backed multifamily have been between 5.9% and 6.1% for more than three years. In the first quarter of 2019, small balance cap rates dropped back to 5.9%. This is a decline of 5 basis points (bps) from the previous quarter and down 16 bps from a year earlier.
Here’s a quick look at the small balance multifamily finance and investment benchmarks for the first quarter of 2019.