Where has all the good equity gone? Attitudes at NMHC and MBA CREF

With conference season in full swing, the PLG team wanted to share some takeaways from two of CRE’s biggest events.

NMHC: Ina Montejo, Loren Biller, and Emily Ramey attended

• The bears skipped NMHC this year, everyone was generally optimistic.

• Lenders are now winning deals based on creativity, which looks like flexibility with covenants and other “non-pricing” elements.

• Banks are gradually coming back, but you still need deposits to push leverage. This is where C-PACE comes in: it can be added to the stack to optimize your bank loan amount and achieve the desired leverage.

• There’s a lot of equity on the sidelines looking to buy multifamily assets, but this generally stays in the core markets with institutional borrowers.

• Construction financing is coming back, but mainly for repeat borrowers or assets in primary markets. When the multifamily assets are in secondary or tertiary locations, C-PACE is a great fit.

MBA CREF: Matthew McCormack, Ina Montejo, Emily Ramey, and Peter Grabell attended

• Raising equity is still a challenge, but the debt market is bouncing back. Debt capital is easier to come by than equity.

• Lenders continue to warm up to the idea of C-PACE due to growing industry adoption.

• The industry is facing a wall of maturities, and the “extend and pretend” tactic isn’t foolproof. Bridge financing is increasing in popularity as a result, and retroactive C-PACE can play a role for recently delivered projects.

• Generally, spreads have compressed for bridge, new construction, etc.

• Data centers are appearing more and more in conversations, but require a strong connection to the electrical grid to work.

Connect with our originations team to meet at industry events throughout the year.