Four in 10 renters in large multifamily apartment communities do not envision homeownership as a part of their American Dream, a survey by Entrata recently found. Instead, lifestyle renters opt for newly constructed, high-quality rental housing with many of the typical amenities of homeownership without its traditional downsides.
The structural strengths of the single-family rentals sector far outweigh cyclical headwinds as it remains well-positioned to build on its momentum in 2025 and beyond.
Multifamily households reached a new high for the third consecutive year in 2023, extending a growth spurt that began after the 2008 housing crisis. With strong tailwinds at its back, multifamily’s latest record may not stand for very long.
The U.S. multifamily market held steady in a more normalized cycle during 2024, following the pandemic-related economic contraction and its rapid recovery. Rental demand remained strong, driven by the ongoing nationwide housing shortage and robust wage growth, as younger generations continued to embrace lifestyle renting.
Unless an 11th-hour agreement is reached, an impasse will trigger the first U.S. government shutdown since 2019. Starting December 21, 2024, many non-essential federal government operations will be limited or suspended, but most multifamily financing activities will not be disrupted.
With home prices nearing all-time highs, single-family rental (SFR) housing is uniquely positioned to capture an even larger slice of the for-sale market. As structured capital markets rebound, SFR will benefit from a set of tailwinds that include robust levels of new construction and favorable trends in cap rates and debt yields. Arbor’s Single-Family Rental Investment Trends Report, developed in partnership with Chandan Economics, shows why this sector’s prospects are so strong.
Building on an organizational commitment to the inclusion of individuals from all backgrounds, Arbor — in partnership with the Real Estate Pride Council and Dr. Sam Chandan, Founder of Chandan Economics, Founding Director, NYU Stern School of Business C.H. Chen Institute for Global Real Estate Finance, and Co-Chair of the Real Estate Pride Council — hosted a speed networking event in Manhattan on November 20 for local LGBTQIA+ students and commercial real estate mentors.
Small multifamily continued to moderate through the midpoint of 2024, amid strong demand despite an elevated interest rate environment and rising property-level yields.
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Inman Equities, a repeat Arbor borrower, was looking for a bridge loan to finance the acquisition and conversion of a student housing property into a market-rate traditional multifamily development. Once the property was stabilized, Inman Equities wanted to pursue permanent financing for a property they felt had tremendous upside potential. The borrower was also interested in making Canyon Park Apartments a “green” community with financing that would reduce energy and water consumption.
First, Arbor’s Eugene Yanovskiy, VP, Sales, worked with Inman Equities to secure an Arbor Bridge Loan to finance the acquisition, conversion, and rehab of a Tallahassee, FL, student housing development. After the property was converted to market-rate multifamily housing, Yanovskiy partnered with Inman Equities again to secure a Fannie Mae Standard DUS® loan to permanently finance the property. Canyon Park Apartments was also enrolled in Fannie Mae Green Rewards, a program that provides more favorable pricing and funds green upgrades that reduce a property’s carbon footprint.
Inman Equities secured $29.5 million in financing to renovate, remodel, and enhance the student housing development, which would become an apartment community with shared amenities, such as a pool, pickleball courts, and outdoor grilling stations. Arbor’s strong industry relationships made the process seamless and timely. After enrolling in Green Rewards, Inman Equities received a lower interest rate and incentives to make environmentally friendly improvements that add value to the property.