The silver lining in a cloudy economy; a real estate view, focused on the multifamily market.
How is the credit crisis impacting multifamily, regarding both the approval of new renters and getting new projects financed?
An obvious casualty of the present dislocation/risk aversion in the real estate capital markets is the apartment supply pipeline. Financing for new apartment construction has become considerably more difficult to secure. Thus, following net completions of about 140,000 units in 2008 and 120,000 units in 2009 across the PPR54 (the 54 largest metros in the U.S.), expected deliveries in 2010-11should be extremely modest. On the resident side of the equation, payroll losses and high levels of home foreclosures mean that landlords are facing a pool of renters who have a more challenging credit background.
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