Driven by investor confidence in multifamily housing’s long-term fundamentals, the volume of debt outstanding in the sector has grown by nearly 150% since the end of the Great Recession. As this piece will detail, where investment dollars have flowed, housing demand has followed. Through an analysis of newly released U.S. Census Bureau American Community Survey data, our research teams pinpoint the growing size and scope of the largest rental housing property type.
Even as the single-family rental (SFR) sector has attracted increased investor activity, the total number of SFR households has moderated due to the influence of overarching housing trends.
In this video, Dr. Sam Chandan, Founding Director of the C.H. Chen Institute for Global Real Estate Finance at the NYU Stern School of Business and non-executive chairman of Chandan Economics, discusses key takeaways from Arbor’s Affordable Housing Trends Report Fall 2023.
The pandemic-era federal and state eviction moratoriums put extreme financial pressure on many in the affordable housing sector. With that issue stabilized and with the recent drop in rates, “many borrowers are now finding that the time is now right to recapitalize or close new affordable housing loans that many borrowers had understandably delayed,” said Arthanais Williams, Managing Director of Affordable Housing at Arbor Realty Trust.
A nationwide housing shortage of rental homes, coupled with the rising costs of homeownership, has fueled the popularity of high-quality, affordable single-family rental (SFR)/build-to-rent (BTR) homes. In recent years, SFR/BTR construction starts have consistently reached new highs. In today’s economic environment, where mortgage payments are more expensive than rent payments in many markets, build-to-rent loans are a forward-thinking investment strategy.
The SFR sector is well-positioned to limit distress through the challenges of the current moment while advancing its standing within the single-family housing market for the long term.
Following a banner year in 2022, the U.S. multifamily market held steady during 2023. Arbor provided research and insights into our markets throughout the year. Here’s a look at our top Arbor research articles from 2023, in case you missed them.
Miami — a market with an attractive climate, urban amenities, and quality transportation options — has seen intense post-pandemic population growth. While its resurgence has been celebrated by many, Miami’s success has come at the cost of weakening rental affordability in the city.
Small balance multifamily loan volume, which includes loans between $1 million and $5 million, reached $51.7 billion in 2018, the highest level of activity in Chandan Economics’ post-financial crisis estimates. Here’s a quick look at the small balance multifamily finance and investment benchmarks for Q4 2018.
Small asset multifamily has displayed sound price fundamentals, with year-end 2017 average rent growth maintaining the upward trend of the previous year, according to the latest Census data. Small apartment buildings offer a unique blend of urban-core proximity and relatively larger apartment unit sizes.
When analyzing the top markets for rental growth in the context of market segment peers, smaller metros registered impressive gains in both small and large multifamily as a share of total rental inventory, according to the latest American Community Survey data.
Rental inventory growth for year-end 2017 showed a clear contrast between the largest and smallest U.S. metros, with the latter displaying a greater increase in small asset multifamily inventory.
The volume of new multifamily loans with original balances from $1M to $5M declined to an annualized rate of $47.0B in the first half of 2018. However, activity picked up in the third quarter, bringing the annualized rate up to $49.2B.
Reversing the trend of consolidation from the previous year, occupied small asset multifamily inventory expanded in 2017, according to new data from the U.S. Census Bureau 2017 American Community Survey (ACS).
Los Angeles has been a standout market for small balance multifamily investment throughout the current economic cycle. Cap rates have remained below national trends and investor confidence in the sector remains strong. Despite higher risk appetites among borrowers, lenders remain cautious as loan-to-value ratios (LTVs) have moderated. Read our 2018 Los Angeles Small Balance Multifamily Investment Trends Report for more insights on the region’s multifamily market.
Join Arbor and Freddie Mac for our complimentary live webinar on Tuesday, Dec. 4 at 2:00 p.m. EST, hosted by Los Angeles Business Journal, to learn about the small balance finance and investment opportunities in L.A.!
View our webinar on finance and investment opportunities in the small multifamily space! Moderated by economist Sam Chandan, this complimentary on-demand webinar from Arbor and Fannie Mae will present actionable ways for small multifamily owners and operators to optimize and expand their portfolios.
Compared to other rental properties, average rents in small asset multifamily vary less by property age, while rents for prewar buildings are going toe-to-toe with newer construction.