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SAN ANTONIO: Is Multifamily Faltering?

National Multifamily

Could the nation’s darling asset class be slowing down in some markets? (Everybody is bound to lose a step, just ask Derek Jeter.) Multifamily rents traded down in the trailing three quarters, causing some to be bearish on San Antonio, but experts at Bisnow’s San Antonio Multifamily Summit didn’t bat an eye. Deverick & Associates managing director Deverick Jordan (here with colleague Jason Ribelin) attributes the dip to the slow leasing season, something all markets experience. Job growth is still strong and Class-A product is getting 5.25% to 6.5% cap rates depending on location, he points out.


On the finance side, things are feeling like 2004 again (we’re all still listening to Usher and preteneding Zoeey Deschanel is interesting), Berkadia SVP Brant Smith says. Aggressive lenders are pushing leverage over 80%, based on forward-looking rents, and adding the interest-only option. We went from a disciplined 10 CMBS lenders to 39 of them very quickly, he says. But luckily, conservative equity still governs the market. One opportunity: The under-$25M market has been underserved, and lenders are now noticing, he says.