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With strong fundamentals, new construction starts, and a sizable amount of capital on the sidelines, the multifamily sector is attracting the attention of eager investors.

The multifamily sector deviates from these patterns. Due to its short lease structures, this sector is more responsive to economic changes. In the last downturn, transaction volume slowdown and price declines in multifamily occurred simultaneously, with prices stabilizing much faster than in other sectors.

Floating rate CRE loans are a challenge when interest rates are rising, which makes sense. Unless an investor, developer, owner, or operator has planned ahead, the increasing rate tide means there is a good chance that whatever floating rate a plan has anticipated won’t be enough.

Investors looking for attractive returns in the U.S. housing market need look no further than workforce rental housing. A chronic shortage of housing in the country, exacerbated by onerous zoning, land use, and environmental regulations, labor shortages, and demographic shifts, has created a prime opportunity for investing in this segment.

Commercial mortgage rates constantly change, and updating live rates is often tricky. Several factors determine commercial real estate loan rates, but the most important factors are supply and demand.

The Federal Housing Finance Agency (FHFA) announced today that the 2023 multifamily loan purchase caps for Fannie Mae and Freddie Mac (the Enterprises) will be $75 billion for each Enterprise, for a combined total of $150 billion to support the multifamily market. The 2023 caps reflect an anticipated contraction of the multifamily originations market in 2023.

Are you thinking of selling your multi-family property?
Here are some of the most frequently asked questions we get from clients looking to sell multifamily properties in Chicago.

While rising inflation can be both disruptive and worrisome to multifamily owners, investors, and employees, the outlook for rental housing remains favorable.

It doesn’t really matter what the current real estate market is like if you are looking to replace the investment property with another investment property, the ultimate decision to sell should also be based upon if you can increase your returns with the new replacement property, not what state the current market is in now.

Because there is a correlation between inflation and goods with a limited supply, CPI also impacts real estate investments and housing costs. Here’s how rising costs affect real estate investments and why making smart real estate purchases can benefit you in periods of high inflation

A broker is a licensed professional who you hire to negotiate the sale or purchase of a real estate for a fee or a commission. However, they are typically not attorneys.

Though wage growth and employment rates are also focuses of Fed policy, a retreat in inflation could give the financial regulator a signal that the aggressive interest rate hikes it pursued this year are no longer necessary.

As many of our Multifamily Clients hire 3rd party Property Management Companies, we are sharing a recent review list of the top 20 Property Management Companies of 2022.

Renters insurance compliance is a problem that multifamily can no longer ignore – the risks and costs are far too great to let it continue slipping through the cracks.

Aurora is forming a tax increment financing district to help pay for $50 million in benefits for the development of a new complex for the Hollywood Casino.

Climate change, shifting criteria, and growing complexity in assets are facilitating an evolution in commercial real estate valuation.

The increasing cost of capital and mounting concerns about ex-ante exit cap rates will ultimately drive buyers’ bids lower and property yields higher for the multifamily sector. So, multifamily property values will face pressure from both the Fed pushing rates and banks following suit with loan interest rates.

Year-over-year rent increases slowed but are still up 8.8 percent last month. September apartment rents are down month-over-month, in what experts from Rent.com call “a hopeful sign” the market is stabilizing.

Data is backing up what many multifamily buyers and sellers already know —cap rates are rising in apartments around the country.

Coming off a year in which the apartment industry arguably turned in its best performance on record, owners and operators are facing more challenges in 2022.

With the cost of building a home at an all-time high, the dream of homeownership is taking a backseat for many people in America. Renting is at the highest level in half a century, and 43.7 million U.S. households are currently making do in rented apartments.

How strong is the country’s multifamily market? A new study by RentCafe found that 43.7 million U.S. households lived in rentals in 2021. That’s the highest this figure has been in the last 55 years.

For many property investors, hiring a property manager is well worth the property management fees charged. It’s efficient to pay someone else who specializes in this work to take care of everything.

>Chicago officials are soliciting proposals to convert vintage office buildings into hundreds of affordable apartments on a stretch of the city’s one-time LaSalle Street financial corridor that in recent years has lost large tenants to new developments.

U.S. apartment sales during the past nine months have outpaced last year but some analysts say it could fall short in the fourth quarter of reaching 2021’s record level.

We won’t see something like 2008 again,” Summers said, noting that homeowners are much less leveraged, inventory is not overbuilt and lenders are stronger and much more careful in underwriting mortgages than they were during the sub-prime crisis.

The multifamily asset class will remain a safe place to deploy capital despite rising rates and inflation, one industry watcher tells GlobeSt.com.

There have been growing concerns about inflation across the commercial real estate sector, but the overall economic outlook is positive.

Downtown multifamily construction has flourished across the U.S. over the last decade in response to people’s changing preferences. Even with many people’s shift to suburban life caused by COVID-19, the shine of city living has yet to be dimmed.

Preliminary data shows a 440-basis-point annual drop in vacancy within Chicago proper at the end of March. Competition for units here is likely to result in sharp rent climbs this year, especially in locales like Lincoln Park, Ukrainian Village, and Andersonville.

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Randolph Taylor

Randolph is a Multifamily Investment Sales Broker with eXp Commercial servicing Multifamily Buyers and Sellers in the Greater Chicago Area.

Latest posts by Randolph Taylor (see all)

• Mid-Priced Apartment Demand Soars Amid Economic Uptick - December 4, 2023
• The New Era of Rental Prices - December 4, 2023
• Billions Flow to Student Housing as Rents Soar - December 4, 2023

  The sequence of rate hikes decay housing affordability. In late July, the Federal Reserve again lifted the overnight rate by 75 basis points to a target range of 2.25 to 2.50 percent. This will likely apply additional upward pressure to mortgage rates, with the 30-year fixed rate already climbing more than 200 basis points […]

Apartment rents across the U.S. are surging in almost 400 cities, with the average price for a 1-bedroom having shot up more than 25% since June 2021, according to Rent.com. The typical cost for a two-bedroom unit is up 26.5% over that period.

Fiscal Year 2023 (FY23) appropriations are in full swing. The House has already quickly passed its proposals out of the subcommittee and full committee including the spending bill which includes funding for the U.S. Department of Housing and Urban Development (HUD).

Slowing construction will likely keep multifamily supply and demand in balance for some time despite fears of a recession, according to some analysts.

As American renters continue to reel from rising housing costs, Wall Street investors are betting that housing will get even pricier relative to the costs of other goods and services.