The multifamily loan market, especially for terms of 10 years or longer, has become more challenging with the recent increase in Treasury bond yields resulting in higher mortgage rates and lower loan amounts constrained by debt service coverage ratios. This effect is further compounded by the challenges (including the associated lender reserves) created by high delinquencies that have been common during the pandemic.

As such, the bridge loan market has become more active as more borrowers are finding bridge loans an attractive option, given that they can:

• provide higher leverage,
• accommodate delinquencies, and/or
• address the need for additional construction funding and/or lease-up delays

Let's compare some specific loans:

Bridge Loans: 3-year terms (plus extensions) with floor interest rates as low as 3%. Up to 80% LTC/LTV with minimum debt yield of 6.75% to 8%.

Bank Loans: 5-year terms with interest rates starting at 3.20%. Up to 75% LTV with debt service coverage ratios of 1.20-1.25x.

Agency Loans: 10-year terms from 3.6% to the low 4% range for 65% LTV or higher.

Construction Loans:



• Banks: interest rates from mid-3% to low 4% range. Up to 75% LTC with debt yield of 8-9%.
• Private Lenders: interest rates from 7.5% to 9.5%. Up to 80% LTC.

Following a multi-year trend, allocations to real estate increased from 23% to 26% in the last year.

Multifamily real estate in urban markets is one of the largest and most active segments of the industry. But with the push toward remote work, some of that market interest has shifted to suburban areas.

With this shift in focus, what does that mean for the future of urban markets? Click below to read the full article.

The MIT Real Estate Innovation Lab recently did a study on the Financial Impact of Healthy Buildings.

More and more studies are showing that health and longevity come from more than just dietary choices. Living conditions, home environments, and especially building health are all important factors.

While it's obvious that healthy buildings mean healthier and happier tenants, this study shows that "healthy building effective rents transact between 4.4 and 7.7% more per square foot than their nearby non-certified and non-registered peers."