With interest rate pressure easing, quality multifamily investment opportunities have emerged from coast to coast, making identifying the optimal location essential. A roadmap for investors, Top Markets for Multifamily Investment Report 2024, developed in partnership with Chandan Economics, ranks the top 50 metropolitan markets found through an analysis of 10 key factors, including affordability, population growth, and climate risk.
Small multifamily properties play a crucial role in providing affordable and market-rate rental housing across the country. But Arbor and Freddie Mac understood that financing in this sector had historically been fragmented when we partnered to create the Small Balance Loan (SBL) program in 2014. As the program celebrates its 10th anniversary in 2024, Arbor is proud to have helped pioneer the product to meet a critical need for our borrowers. A six-time Top Small Balance Loans Lender, Arbor has the right experience to expertly customize loan products and align your asset’s long-term goals with your community’s needs.
As we move through the second half of the year, SFR’s structural strengths give it a solid foundation to grow as economic conditions continue normalizing.
For undergraduate students nationwide, apartments fill the gap in campus housing. Off-campus housing offers a better value proposition in many markets, giving students more space at a competitive price. In other markets, students pursue apartments due to insufficient dormitory space. As colleges and universities acquire and build to keep pace with enrollment, the supply-demand imbalance has created new opportunities for multifamily real estate investment.
Even with the market in flux, opportunities continue emerging for well-positioned investors. Historically, some of the best multifamily deals were closed in down cycles or during the upswing to normalcy. Arbor’s Special Report Fall 2024 details why the current economic climate is ripe for investment.
Following strong post-pandemic gains, the U.S. labor market has cooled over the past few months, placing multifamily investors in a position to realize the benefits of less restrictive monetary policy.
Small multifamily continued to moderate through the midpoint of 2024, amid strong demand despite an elevated interest rate environment and rising property-level yields.
The single-family rental (SFR) sector’s performance surged again last quarter, demonstrating its ability to thrive in all economic cycles. SFR construction continued its record-breaking ascent as CMBS activity blossomed. Arbor’s Single-Family Rental Investment Trends Report Q3 2024, developed in partnership with Chandan Economics, examines the sector’s fundamentals as would-be homeowners weigh the rent-vs-buy calculation.
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Units
Knoxville
Year Built
Haven Realty Capital needed end-to-end financing for a 54-unit built-to-rent (BTR) community in Knoxville, TN. The property was unique in that its individually parceled homes did not have the types of amenities, such as a pool, gym, or clubhouse, commonly found in multifamily real estate. Haven Realty Capital was looking for an innovative and experienced lending partner who could develop a creative solution to secure permanent funding through a Government Sponsored Enterprise (GSE).
On behalf of the borrower, Arbor engaged in extensive conversations with Freddie Mac to develop an out-of-the-box solution to refinance this dedicated rental community with permanent financing. Our team had the pleasure of accompanying several senior representatives of Freddie Mac to Knoxville on a full-day tour of the property. We were delighted to see them determine that this community was a good fit for Freddie Mac multifamily financing because many of its features, including two-car garages, upscale interior design, and premium rental packages, would help attract and retain tenants.
Arbor was uniquely positioned to handle the complexities of this type of BTR transaction from start to finish. Our team was instrumental in helping Freddie Mac understand that this asset was consistent with traditional multifamily deals because it has the potential to attract quality, long-term tenants with wide-ranging amenities. Arbor created a new financing structure that allowed our borrower to purchase and lease up this community of two-story, four-bedroom, paving the way for similarly unique deals in the future. Over the years, Arbor has become one of Haven Realty Capital’s lenders of choice.