Articles

Annual Build-to-Rent Starts Hit Another High in Q3 2024

As more single-family rental (SFR) operators rely on build-to-rent (BTR) development to supply new inventory, construction starts have steadily risen, reaching another record high in the third quarter of 2024. SFR/BTR construction has eclipsed 92,000 units in the last four quarters — an all-time high and an annual increase of 31.4%.

Articles

LIHTC Program: An Impactful Affordable Housing Financing Resource

As renters face a national shortage of 7 million low-income rental homes, the U.S. Department of Housing and Urban Development’s (HUD) Low-Income Housing Tax Credit (LIHTC) program is pivotal in helping to close the affordability gap for renters. It is the nation’s most significant resource for affordable apartment housing construction, which gives state and local agencies approximately $10 billion in annual budget authority to issue tax credits for affordable housing development.

Articles

FHFA Loan Caps for 2025: What Multifamily Borrowers Need to Know

The Federal Housing Finance Agency (FHFA) announced a $3 billion boost to Fannie Mae and Freddie Mac’s volume cap for loan purchases in 2025 to $146 billion ($73 billion for each agency). This increase in FHFA loan caps for 2025 aligns with industry expectations, given the anticipation of improving market conditions and lending activity expected in a lower interest rate environment. Next year’s cap for the Government-Sponsored Entities (GSEs) is an increase of approximately 4% from the $140 billion limit set for 2024.

Analysis

U.S. Multifamily Market Snapshot — November 2024

The U.S. multifamily market held steady in a more normalized cycle through the first three quarters of 2024, following its skyrocketing recovery from the pandemic-related contraction. Rental demand remained strong, driven by the continued nationwide housing shortage and strong wage growth, while the high levels of new construction seen over the last two years appears to have peaked.

Current Reports

Small Multifamily Investment Trends Report Q4 2024

Small multifamily’s normalization pushed forward last quarter as the Federal Reserve made a long-awaited reduction to the target federal funds rate. Arbor’s Small Multifamily Investment Trends Report Q4 2024, developed in partnership with Chandan Economics, shows signs of stability have multiplied. Robust rental demand, a limited supply of quality affordable housing, and several other promising developments should support the subsector’s strength heading into 2025.

Analysis

Top U.S. Multifamily Rent Growth Markets — Q3 2024

The U.S. multifamily market held steady in a more normalized cycle during the third quarter of 2024. Rental demand remained strong, while new leaders emerged among the top markets for rent growth.

Articles

Top Markets for Wage Growth in 2024

One of the most essential factors multifamily investors need to consider before executing a transaction is the health of the local labor market. Wage growth and other trends are driven by a delicate, constantly adjusting balance of labor supply and demand. In some markets, an inflow of employers can cause wages to spike. In others, population outflows can create the same effect. In this deep dive, we expand on the data findings from the 2024 Top Markets for Multifamily Investment Report, exploring the unique conditions driving metro wage growth trends.

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Ivan Kaufman on Secrets to Success: “Inside the ICE House”

Ivan Kaufman on Secrets to Success

Ivan Kaufman, the chairman and CEO of Arbor Realty Trust, Inc. (NYSE:ABR), was featured on Intercontinental Exchange’s “Inside the ICE House” podcast, hosted by Josh King. In an episode titled “Arbor Realty Trust CEO Ivan Kaufman Builds an Empire From Multifamily Homes,” Kaufman shared insights about entrepreneurship and multifamily trends in 2020.

Although COVID-19 has taken a severe toll on the economy, Arbor has continued its upward growth. In the second quarter of 2020, the REIT increased its core earnings and raised dividends for the ninth year in a row. Kaufman partly attributed the company’s success to its diversified income streams, including originating and servicing loans and owning real estate.

“Our core asset class is multifamily and that’s not by accident. Going through several recessions including the Great Recession, it was evident that the multifamily asset class is extremely resilient,” said Kaufman. That’s one of the key reasons why Arbor is the best performing mortgage REIT in the industry.

Arbor has adhered to its steadfast principles of maintaining strong fundamentals, while being nimble in innovating products and services. Kaufman explained that the CARES Act provided money, which enabled tenants to pay rent. This allowed borrowers to pay their mortgages and institutions to service their loans. Thus, the real estate market remained stabilized. As one example of its pioneering actions, with its borrowers, Arbor created a rental assistance program (ARAP) to supplement governmental assistance to tenants financially impacted by COVID-19.

Arbor’s chairman predicted technology will streamline processes, improve information and lower costs. Kaufman has observed significant increases in efficiency with electronic signatures and the elimination of duplicative data. “I wouldn’t be surprised if getting a multifamily loan in a year or two from now will go from 30 to 15 days. We’ll continue to see those kinds of improvements,” he stated.

With COVID-19’s disruptions, Kaufman provided a CRE perspective. He emphasized that 60% of asset classes, comprising multifamily, single-family rental and industrial, are performing extremely well. Other property types, such as retail, hospitality and offices, face different challenges.

For multifamily, depending on the location, Kaufman forecasted a slight decline in rent growth and occupancy, with flight to the suburbs. However, he commented, “That’s going to be offset by price appreciation because multifamily is such a strong investment asset class. With low interest rates, you’re going to see cap rates compress and values go higher.”

In the fourth quarter, multifamily purchase transactions will return to normal and refinancings will reach record levels, according to Kaufman. This portends additional future profitability for Arbor.

Yet the forward-thinking CEO refuses to rest on his laurels and has even greater aspirations for his company. “Our mission is to become fully vertical and to offer every product for multifamily, from investment sales all the way through servicing,” said Kaufman. “Whether it be equity, preferred equity, permanent debt, bridge products or construction lending, we will have a program over the next two to three years.”

For more on Kaufman’s business strategies, and his perspectives on the real estate industry and multifamily weathering the current economic storm, listen to the full podcast below and more of Ivan’s recent appearances in the news.

Learn about Arbor’s multifamily financing solutions for your investment goals. Contact Arbor today to speak with one of our origination specialists.