Multifamily Capital Markets Update (August 2020)

The 10-year Treasury Yield has remained stable keeping in a range of around .60% -.75%. Debt capital is available from the agencies but with reserves. Agencies report loan closings in 2Q in line with 2019.

Below are key takeaways from the following reports:

U.S Multifamily Outlook – Summer 2020 – Yardi Matrix Link

Download the PDF version of this report here:

U.S. Multifamily Outlook – Summer 2020

Yardi Matrix

  • Gateway Cities, in particular NYC, are seeing negative rent growth with concessions typically not seen before in the market
  • A Class properties in larger cities have declined the most, new product taking longer to lease-up
  • Properties have seen expenses decline in the short run which has offset net collections which have declined slightly
  • Smaller cities and B type properties have fared better than larger cities and A properties
  • Renewals are coming with concessions to keep existing tenants
  • Collections continue to be strong, however, have declined slightly in August
  • New deliveries will decline in the next few years as projects have struggled to start since March
  • Agency volume is back to similar volume as 2019 after a few months of decline
  • Capital is abundant in the market which reflects pricing of assets which has seen little if any decline
  • Acquisitions have slowed considerably since March.       Many buyers are looking for discounts with sellers balking. Activity has picked up as of late as Agency debt is being priced around 3%.
  • Cap rates have compressed with lower debt financing to offset lower cash flow projections