5 Takeaways from MBA CREF San Diego

CoreVest Finance recently attended the MBA CREF/Multifamily Housing Convention & Expo in San Diego, CA. Known for being a cornerstone in the real estate finance sector, MBA CREF 2024 provided a platform for over 2,000 attendees, including real estate investors, lenders, brokers, and service providers, and provided invaluable insights into the current state and future trajectory of the real estate market. Here are our team’s top 5 takeaways.

Shift in Lending Landscape

As banks retreat from commercial real estate finance, private lenders like CoreVest are filling the gap, attracting borrowers with more favorable terms and less stringent requirements. This shift coincides with investors seeking bridge financing amidst anticipation of lower permanent rates, although timing remains uncertain. Banks, less attractive due to recourse and deposit requirements, are seeing diminished demand while nonbank lenders experience increased interest.

Market Trends and Opportunities

Robust demand persists for financing in Build-for-Rent (BFR) and multifamily construction, particularly in the class B/C asset segment. There’s also an uptick in multifamily investment sales, especially for older vintage properties with achievable rent growth. Additionally, there’s a trend of multifamily operators shifting towards purchasing BFR deals from major homebuilders, with some experienced builders considering ground-up construction for BFR properties, indicating evolving market preferences.

Lender Behavior and Competition

Lenders are becoming more aggressive for viable deals, adjusting credit metrics to offer leverage in a high-rate environment. Brokers are increasingly open to engaging with non-bank and life insurance company (lifeco) lenders due to the pullback from traditional banks.

Steady Deal Flow, Optimistic Outlook

Despite lighter than expected deal flow, there is optimism regarding the volume of transactions in 2024. While 2023’s volume is anticipated to carry over, there’s a growing belief that more transactions will materialize, supported by positive commentary suggesting transactions are loosening up. However, there is uncertainty about what will be the most active asset class in 2024.

Economic Indicators and Market Speculations

The Federal Reserve aims to curb inflation to 2%, while there are concerns about a cooling job market and tightening credit conditions hinting at a potential recession. Despite negative commercial mortgage origination in certain sectors like office, industrial, and retail, a significant volume of CRE mortgages are maturing in 2024, with multifamily properties comprising approximately 13% of that total.

These takeaways underscore the dynamic nature of the mortgage banking community and its responsiveness to market shifts and challenges. As attendees grapple with ongoing concerns such as rate hikes and perceived downturns in certain segments, the overall industry remains resilient. With a wealth of perspectives shared, we thank MBA CREF for the opportunity to partake in valuable learning experiences, vibrant discussions, and meaningful networking opportunities.

CoreVest is a market leader in real estate investment financing needs and has helped thousands of investors finance over 150,000 units across the nation. We’d love to talk with you directly on how we can maximize the value of your investment projects or properties. For more information about how CoreVest can help you maximize the value of your rental or investment portfolios, please call us at 844.223.7496 or email at [email protected].