The commercial mortgage market continues to improve, with apartment and multifamily lending leading the way. “National apartment occupancy in May soared to the highest level in at least six years,” according to CNBC. Given the surge in apartment and multifamily occupancy and availability, now is a great time to begin brokering small commercial loans for these property types. Here’s why:
- Supply and demand: According to apartment data and research company Axiometrics, occupancy rates are very high for apartment and multifamily properties with “95 percent of all units filled, even as thousands more become available.” About 180,000 new units have become available in the past 12 months. With plenty of supply and demand, there will be plenty of investors looking for commercial mortgages on these property types.
- Economic uncertainty: While sales are slowly recovering for single family residences, many Americans are still choosing to rent. Younger Americans in particular are faced with weaker employment options, student debt and a lack of confidence in the housing market.
- Competition and innovation: The increased supply in the rental market has increased competition as well. This has led to innovations in the market, including a slew of new apps and websites designed to simplify the rental process.
Given the current success of the rental market, it’s likely that new investors will want mortgages to purchase apartment and multifamily properties, and that existing investors will want to make improvements to or expand their current holdings. If you’re a commercial mortgage broker or a residential broker looking to close more commercial loans, the apartment and multifamily market is a great place to start.
Are you working with a borrower who needs to finance an apartment or multifamily property? Call APEX Mortgage Corp. at 800-262-2739 or click here.