Intelligent Investment

Opportunities and Outlook: Multifamily in 2024

January 24, 2024 5 Minute Watch

Capital Markets Conversations
Condominiums

Kelli Carhart, Executive Managing Director of Multifamily Capital Markets, shares her thoughts on capital availability, distress-related opportunities, and sentiment for 2024.

Summary

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Kelli Carhart

President, Multifamily, Capital Markets

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  1. Capital availability
    The multifamily debt markets are highly functional, largely because of the agencies, which support stability and liquidity in times of disruption. In 2024 the agencies are likely to remain a dominant force for stabilized assets with loan purchase caps totaling $140B. We also expect debt fund activity to pick up—a short-term solution as we work through peak interest rates.
  2. Distress and related opportunities
    Most of the estimated $45B multifamily debt funding gap comes from maturing loans, primarily those with short-term floating rates. Many will be able to get extensions. Those with syndicated capital stacks will likely need to sell or find gap capital to solve their challenge. Forced opportunities will arise for assets that cannot find gap capital. Look too for opportunities in new construction and nearly stabilized properties as developers seek capital and liquidity amid record deliveries.
  3. Improved sentiment
    With an undersupply of housing, greater stability in the capital markets and possible decreases in rates, investors are more confident and are convicted in the multifamily space. We anticipate more transactional volume in Q2 and Q3 of 2024 as capital markets conditions improve and we get more data points on values. Despite headwinds from 2023–2024 deliveries, we are positioned for robust recovery in 2026.

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