The annual conference focused on the multifamily market outlook for 2025. The expert panels were broken out into finance, brokerage, property management, and development.

Finance Discussion

Many borrowers are choosing floating rates vs fixed rates with the hopes of lower rates in the future. Bond yields have been trending upward in recent weeks. Pressure on the Feds to lower interest rates due to lower inflation is prevalent.

The finance panel addressed numerous challenges and issues on loan originations and workouts as well. Construction costs can be a moving target during the funding phase. Tariff pressure and supply chain issues continue to affect construction budgets.

Delinquencies continue to be a problem as borrowers are "tapped out" of resources. Down payments with loan covenants at 60% LTV are common. Cap rates range from 5 to 5.5% with hopes of lowering by 4th quarter. The market experienced a slight compression, which was well-received by sellers. 

The question of emerging markets was posed to the panel and some interesting responses arose. "Revolving door-2 off the cliff and 2 more enter", plenty of cash out there and what was old is new again, and scratch and dent buyers/lenders are back in full force.

The finance group discussed the "flip-flop" approach by Fannie Mae and Freddie Mac. Both entities are refining what they are doing and loan desires seem to be a moving target.

Lastly, fraud continues to raise it's ugly head on the front lines, which puts lenders on high alert. Relationships are the key to success, which all panelists concurred!

All and all, the outlook for 2025 is stable and 2026 is where the rubber meets the road. One panelist gave 2 outlooks with varying opinions-Stay Alive in '25 or Thrive in '25.

I personally prefer the latter...

Design trends in Multifamily panel discussions are next on the agenda.