Eight Common Commercial Real Estate Investor Questions

Whether you are just beginning your investing journey or are looking to take your portfolio to the next level, Arbor stands ready with our talented team and decades of expertise. Given our vast experience and national footprint of successful deals, we are familiar with many common commercial real estate investor questions, such as the ones answered in this article.


Multifamily is Well-Positioned for Short- and Long-Term Growth

With the macroeconomy maintaining its underlying strength and a handful of rate cuts expected by the Fed within the next 18 months, green shoots of optimism within the multifamily sector are multiplying. Even as high interest rates impede normal operations, stabilization is underway while the sector’s long-term prospects remain unwavering. In this deep dive, our research teams will explore the tailwinds underpinning the multifamily sector’s short- and long-term outlook.

Refinance of Existing HUD-Insured Loan

FHA® Interest Rate Reduction (IRR) Refinance of Existing HUD-Insured Loan   Arbor provides this program to reduce the interest rate on qualified existing HUD-insured multifamily loans. The HUD-insured loan remains in place, with reduced payments based on the new rate, the current balance, and the remaining term. The existing prepayment penalty must be paid in full. V041624

Mortgage Insurance for Rental Housing for Urban Renewal and Targeted Redevelopment

FHA®220 Mortgage Insurance for Rental Housing for Urban Renewal and Targeted Redevelopment*   Arbor provides FHA-insured, long-term, fixed rate financing for new construction and substantial rehabilitation of multifamily projects nationwide. This program provides for both construction and permanent financing for projects in urban renewal areas and other areas where local governments have undertaken designated revitalization activities. Applications are typically processed in two stages (preliminary application followed by firm application). Affordable/rental assisted projects and HUDexperienced development teams may request a “straight to firm” application, saving significant time by eliminating the preliminary application stage. V020224


Regional Construction Trends: Annual Multifamily Completions Surged in the South and West

After the volume of newly issued multifamily permits hit a 37-year high in 2022, multifamily completions surged another 22.3% last year. As the sector continues to gain strength, its growth has remained concentrated in the southern and western regions of the country, according to an analysis of new data from the U.S. Census Bureau’s Survey of Construction.


The Evolving Characteristics of Multifamily Construction

During the post-global financial crisis (GFC) cycle, a disproportionate share of new multifamily construction was of high-rise units in properties with amenities. However, the tides have turned. The rising cost of homeownership has brought the need for more affordable housing development in the U.S. to the top of many legislative agendas. In this deep dive, our research teams utilize data from the U.S. Census Bureau’s Annual Survey of Construction to show how and why the characteristics of new multifamily properties continue to evolve alongside shifting market needs.


Video: Growing LGBTQIA+ Visibility in the CRE Industry

LGBTQIA+ Pride Month is recognized in June, but its lessons are timeless. During a recent conversation between Tres Seippel, Director, Construction Management at Arbor, and Dr. Sam Chandan, Founder of Chandan Economics, Founding Director, NYU Chen Institute for Global Real Estate Finance, and Co-Chair of the Real Estate Pride Council, Seippel shared why it is more important than ever for the industry to embrace visibility and show support for employees who identify as LGBTQIA+ or other diverse backgrounds.

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Ivan Kaufman Talks 2020 Multifamily Trends on Bloomberg Markets “Odd Lots” Podcast

Ivan Kaufmans talks multifamily trends on Bloomberg Markets Odd Lots

An Exploration of Real Estate Market Trends During the COVID-19 Pandemic

Listen to the complete podcast.

Ivan Kaufman, the chairman and CEO of Arbor Realty Trust, Inc. (NYSE:ABR), was interviewed by Joe Weisenthal and Tracy Alloway on the “Bloomberg Markets” Odd Lots podcast. In an episode titled “The CEO of a $1.4 Billion REIT Explains Housing,” he discussed why multifamily reigns as the top asset class for investors during the current COVID-19 pandemic and recession. Kaufman also shared insights on why his company is a top performing mortgage REIT, even amidst the ongoing, national economic turmoil.

In the second quarter, Arbor raised dividends for a ninth year in a row. Plus, the REIT generated core earnings in excess of the increased dividends, at $0.46 per share.

“My answer to many people who ask why are we doing so well, and why is our company outperforming is very simple. We’ve operated in many cycles. You can’t use liquidity to drive your returns and you have to be able to have a solid balance sheet and the right asset classes,” said Kaufman. He added that if companies are overleveraged or make cash flow mistakes, it’s very hard to correct those errors in a recession.

Arbor focuses on multifamily housing, loans for sale to the agencies, bridge loans and single-family rental (SFR) products.

He stated that even with the economic downturn, 60% of the real estate market has been on the winning side – referring to multifamily, single-family rental and industrial as positive asset classes. They account for approximately $6.5 trillion of the total U.S. CRE market, which the National Association of Real Estate Trusts (Nareit) has estimated to be $14 trillion to $17 trillion.

“Historically, the multifamily asset class has been the most resilient. Even when it falls, it recovers very quickly. People will want to put more money into the multifamily sector, driving prices up, cap rates down. That will offset a little bit of a decline in potential rents and occupancy,” said Kaufman. “The multifamily asset class because of those factors will be an out-performer.”

The REIT’s chairman noted governmental assistance with the CARES Act and other supplemental payments allowed renters to continue to make rent. As a result, owners could make mortgage payments and the market remained stabilized. He anticipates a second stimulus package, although questions persist surrounding the forthcoming amount of support.

Arbor is a leading lender in the built-to-rent, SFR space. Prior to COVID-19, when millennials began moving to the suburbs to form new households, the company developed its SFR program. By increasing the demand for less density, the virus accelerated the migration pattern. Due to an inventory shortage, suburban housing is rising in value and SFRs are seeing greater occupancy.

Ten years ago, the build-to-rent SFR space barely existed. However, it now makes up approximately 5% of all new housing starts, said Kaufman. On the multifamily side, Arbor is less active in urban areas but has financed workforce housing throughout the U.S. with communities already enjoying lower density configurations. Currently, occupancy and rent collection at Arbor-financed properties are down only about 1.5%, with zero delinquencies and just a handful of forbearance requests.

But COVID-19 hit the retail, hospitality and office sectors with a vengeance. Kaufman anticipates that it will take at least six to 12 months for travel and leisure to get back on its feet, and retail will undergo significant adjustments.

He has observed that the suburban office market is starting to boom and predicts post-pandemic remote working will rise. Nonetheless, Kaufman believes people will return to urban offices, and require greater social distancing, thus a larger footprint per individual. He added when liquidity returns and transactions with non-housing properties resume, then their price discovery will surface.

Listen to the complete podcast.

Learn more about Arbor Realty Trust’s multifamily housing loans. Contact Arbor today to speak with a specialist about our different financing solutions.