Between now and the end of 2029, 58,000 multifamily loans with a (current) book value of $525 billion will come due. The $525B amount is one-half of the total outstanding debt secured by apartments which exceeds $1.0 trillion. Between now and the end of 2025, 6,800 multi loans with a face value of  $150 billion are coming due. Many of the loans, originated three, four or five years ago, are at rates that were last seen in the 1960s. Rates obviously aren’t at those levels now and those low rates may never be seen again (at least not in my lifetime, in my humble opinion). Some of the properties secured by debt won’t adequately underwrite to today’s rates. Many of these properties may be heading back to the lender via deeds-in-lieu or foreclosure. This is occurring now with office properties as they’ve faced the double-whammy: higher interest rates and (significantly) lower property values. Some multifamily properties may experience the same fate.  

 

 

Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.

 

Please find us at svikhart.com or contact us at 801-550-5684 to learn about the real estate services the firm provides. To subscribe to the firm’s newsletter addressing events of the day please follow this link Newsletters.