Even the most pessimistic apartment market researchers agree that very few apartments were empty in the third quarter and that the vacancy rate in the multifamily rental sector will remain low in the short-term.
It’s relatively easy to find an apartment loan today. “For almost any apartment deal today, you can find a lender, you usually can find a couple of them,” says Mike Riccio, co-director of national production for CBRE Capital Markets.
Solar power is becoming a much better investment for owners and developers of apartment properties. The price to buy solar panels has dropped significantly, and today’s photovoltaic panels are much more efficient than just a few years ago. Prices are now so low that a set of rooftop solar panels sometimes makes sense purely as an investment, without any extra cash from subsidy programs or tax credits.
After the global financial crash, it seemed like the housing market would take years to work through its inventory of unwanted single-family houses. Now, however, there are far fewer homes available for sale, and many developers are turning to new construction to create new rental housing.
Banks are eager to lend money to apartment developers to build new apartments. “We still get a number of bids for every deal—four to six or more,” says Michael Riccio, co-head of national production for CBRE Capital Markets.
With prices so high for apartment properties, any loan based on today’s appraised values is going to look very large compared to historic prices. But multifamily CMBS loans are especially troublesome, according to Moody's Investors Service.