4A — August 20 - September 16, 2021 — Investment/Multifamily Financing — Financial Digest — M id A tlantic Real Estate Journal
www.marej.com
I nvestment /M ultifamily F inancing
By Pat Jackson, Sabal Capital Partners, LLC Commercial Real Estate Capital Markets Amidst Spreading COVID Variants
A
is increasing at a much slower pace and, despite some debt availability, fixed rate loans are off the table. Borrowers have little desire to lock them- selves into 10-year loans with lower proceeds. Floating rate, shorter duration loans are common today and, ultimately, this sector has a long road to recovery. Conduit lending is slowly climbing with strong demand for bonds giving lenders some confidence to transact. Spreads are tightening and COVID re- serves have relaxed. Yet many debt providers face volume
challenges. What may help volumes spike over the com- ing months are the caps put in place by Freddie Mac and Fannie Mae, as the agencies compete with the conduits. Caps could lead borrowers to turn to conduits to source debt. Additional agency activ- ity, including relaxed COVID reserves is noteworthy. With new leadership at the helm of the FHFA, the effort to remove the agencies from conservator- ship has stopped for now. It’s likely we will see the agencies focus on the country’s supply of affordable housing stock, a positive sign for multifamily finance activity. However, the apartments sector is still plagued by evic- tion moratorium issues. Once all the moratoriums expire, non-performing assets will be exposed. The industry should expect additional distress to emerge at that time. Despite that, the overall health of the multifamily sector is expected to sustain. If COVID-19 taught us anything, it’s that rental housing is undeniably essen- tial, in demand and resilient. Pat Jackson is CEO of Sa- bal Capital Partners, LLC. , a single-source commercial real estate lender. Sabal is a partner to both Fannie Mae and Freddie Mac in the agen- cies’ respective loan programs for multifamily properties na- tionwide. The company also of- fers a conduit CMBS program for core commercial real estate loans nationwide. MAREJ Cinnaire announces $52M Mid-Atlantic Capital Fund Closing MID ATLANTIC — Cin- naire announced the closing of the organization’s 2021Mid- Atlantic Low Income Housing Tax Credit (LIHTC) Fund. The $52 million fund will bring more than 570 units of affordable housing to com- munities across DE, MD, NJ and PA. The 2021 Cinnaire Mid- Atlantic Capital Fund will provide a tax advantaged investment and return to in- vestors, positive Community Reinvestment Act consider- ation from bank regulators, and supports Environmental, Social and Governance (ESG) investment strategies. MAREJ
s we enter the last quarter of 2021, some commercial real estate
resumed, however the sector continues to be impacted by inconsistencies across regional and international quarantine and vaccine mandates. Traffic at restaurant, retail and en- tertainment venues is proving steady, and some employers are bringing people back into the office, even if just some of the workforce for part of the time. These factors have partially improved commercial real estate dynamics, however the Delta virus variant is rap- idly gaining ground across the country and it, along with additional variants, is acting
as a commercial real estate recovery wild card. Obviously, not all is rosy. Capital markets reflect posi - tive improvements along with distress. After a considerable period of dealing with the pan- demic, lenders are more com- fortable financing the asset classes initially most impacted by COVID-19, with increasing interest in office and retail transactions. However, lend- ing activity is measured and could change at any time if new variants reverse economic progress. Finance activity for hotels
f undamen - tals continue to improve. Despite new COV I D - 1 9 v a r i a n t s w r e a k i n g havoc, much of the econ- omy has re-
Pat Jackson
opened and both the industry and consumers at-large have learned to adjust to a new, quasi-normal way of living and working. Some travel has
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