The multifamily sector's sustained healthy performance is attracting new investors from here and abroad just as a wave of refinancing approaches.
"There is a lot of supply and also a lot of demand for multifamily debt," said David Brickman, executive vice president and head of Freddie Mac Multifamily, McLean, Virginia, speaking at the MBA Commercial Real Estate Finance/Multifamily Housing Convention & Expo in February. "There is a lot of liquidity in the market. But against that backdrop is a very healthy set of fundamentals," he said.
Brickman said he continues to feel "very optimistic" for the future of multifamily. "Despite more supply coming online, we still see demand for multifamily housing growing," he said. "While the capital flows may be a little nervous, we are very upbeat and not concerned where cash flows are going and in terms of supply and demand."
Jeffery Hayward, executive vice president and head of multifamily with Fannie Mae, Washington, D.C., agreed. "Between 2009 and 2011, not many units were added to the market," he said. "And 100,000 apartment units go obsolete every year. So I think the market is healthy and will continue to be healthy, though some markets may see an imbalance until things settle up. But I agree with David [Brickman]--there is a lot of capital. We'll be on the watch for that."
MBA conference panelists reported confidence that the market could see a wave of refinancing as multifamily loans mature over the next few years. "We have adequate debt capacity to refinance all those loans," said Michael May, managing director with Cantor Commercial Real Estate, New York.
Hayward noted current low interest rates could...