Current Reports

Affordable Housing Trends Report Winter 2024/2025

Continually challenged by low inventory, affordable housing sits at a crossroads following the 2024 election. Incoming leadership plans to introduce market-based principles to an agenda that may also include an expanded Housing Choice Voucher program. Arbor’s Affordable Housing Trends Report Winter 2024/2025, developed in partnership with Chandan Economics, provides insight into a pivotal multifamily sector about to embark in a new direction.

Articles

Investors Upbeat on Multifamily as Rate Cuts Stimulate Deal Activity

The skies surrounding commercial real estate markets are clearing, suggest the Emerging Trends in Real Estate 2025 (ETRE 2025) findings. As pandemic-related structural changes settle into place, cyclical economic trends, such as interest rates, demand, and construction levels, are now the key drivers to watch.

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.

General: 800.ARBOR.10

Ivan Kaufman Talks Arbor’s Success in Multifamily During COVID-19 at NYU Capital Markets Leadership Series

Kaufman Shares Why Multifamily Has Remained a Strong Asset Despite the Global Pandemic

Ivan Kaufman, the founder, chairman and CEO of Arbor Realty Trust, Inc. (NYSE:ABR), appeared as the first featured guest on the NYU Schack Institute of Real Estate’s Capital Markets Leadership Series. Defying the negative economic pressures of COVID-19, Arbor achieved strong earnings. Kaufman shared an insider’s view of what’s behind his company’s phenomenal success and forecasts for the multifamily sector’s post-coronavirus future.

“Our earnings have never been better,” Kaufman stated to the program host, Sam Chandan, dean of the Schack Institute. “Most people are cutting their dividends or trying to figure out how to maintain them. We’ve increased our dividend in the pandemic.”

Arbor’s experienced management team anticipated the recession, following a 10-year bull run. The company structured its balance sheet and its lending, positioning itself for strong performance during the economic downturn. As suggested in other recent interviews, Ivan emphasizes how the REIT has a strategically diversified business platform. This includes serving as a top Fannie Mae and Freddie Mac small multifamily lender having a more than $5 billion balance sheet, and being active in growth areas such as single-family rentals (SFRs).

With headquarters in Uniondale, New York, Arbor has had many of its employees return to the office ahead of its peers. Kaufman advised companies to exercise common sense with phased re-openings and to consider density, transportation and the effectiveness of remote working.

Despite COVID-19, multifamily has performed exceptionally well. He credited the CARES Act with enabling people to pay rent and keeping the economy afloat. Prior to the pandemic, multifamily properties experienced consistent rent increases of 3% to 5% each year, for the last decade.

Even with the coronavirus disruptions, Kaufman opined multifamily remains a solid asset class. “When you underwrite a loan and the property is 95% occupied, there is coverage. You can go down to 87% or 86% occupied before you start seeing some pain. So, we’re in good territory,” he explained. “It’ll get a little bit softer, but I think overall, we’re in an extraordinarily great place.”

He pointed out that investors can refinance with today’s low interest rates, offsetting a decline in rents and occupancy with reduced mortgage payments.

However, the head of one of the nation’s leading multifamily lenders noted Class A urban properties will suffer as COVID-19 has accelerated the demand for reduced density and millennials are moving to the suburbs to form families.

“Absorption is going to be a lot slower. That will be the soft part of the market, no question about it,” said Kaufman. “The workforce housing, the B and C, specifically Class B properties, are holding up extraordinarily well.”

In addition, Fannie Mae and Freddie Mac support the multifamily market, providing liquidity and consistency in multifamily lending. During the interview, Kaufman also discusses the growth in SFR demand, additional investment opportunities, other capital sources, the CMBS market, technology and much more.

Listen to the full NYU Schack Institute of Real Estate Capital Markets Leadership Series Interview.

—–

For more of Ivan Kaufman’s perspective on current multifamily trends, visit Arbor in the News. Contact Arbor to learn about our multifamily solutions to address your business goals.