Small Multifamily Investment Snapshot — Q4 2020

Estimates of new small multifamily lending volume finished 2020 at $55.7 billion. In 2019, originations reached an all-time high of $59.2 billion. The current estimate represents a $3.6 billion shortfall and a 6.1% decline in lending activity from the previous year. Notably, a significant surge in refinancing activity muted the severity of 2020’s drop-off.
As measured by the Arbor Small Multifamily Price Index, small multifamily prices improved during the fourth quarter of 2020, up 1.6% from the third quarter and up 2.0% from one year ago. The backstopping of agency liquidity has meaningfully supported small asset pricing throughout the pandemic. During an extended period of heightened buyer caution, the availability of refinancing capital has given property owners a viable alternative to selling into an imbalanced market.
Here’s a quick look at the Q4 2020 small multifamily benchmarks.
For more insights on the small multifamily market, view our Q4 2020 Small Multifamily Investment Trends Report.