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Wall Of NYC Multifamily Maturities Forcing More Sellers To Market, Where Buyers Eagerly Await

New York City’s multifamily market may finally see some action in the coming months following months of stalemate of buyers and sellers failing to agree on pricing.

There are billions of dollars in multifamily loans facing upcoming maturities, but investment sales brokers and lenders say those will face a distinctly different destiny from the distress hitting the city’s office market. The need for capital to pay off existing loans is more likely to push owners to sell, but with a constrained housing supply and steadily growing rents, they might like the offers they get.


“The supply-demand metrics for New York City multi is extremely strong,” said Keyvan Ghaytanchi, chief investment officer at real estate developer and investor BEB Capital. “We found that for at least the next 20 years, it seems like the demand is going to outpace supply. So it's a very robust market.”

Almost 30% of the multifamily loans in NYC set to mature in the next 24 months, totaling $9.39B, are “at-risk,” according to an April analysis of CMBS data published by Trepp. And while office is taking most of the heat as an at-risk asset class, nationally it accounts for just 17% of at-risk loans, Trepp found. Multifamily, by comparison, accounts for 43%.

Some NYC owners will still be forced to sell in the coming months as they approach maturity dates for loans in order to keep the rest of their portfolio afloat, Compass Vice Chair Adelaide Polsinelli said. 

“There's a come-to-Jesus moment. They either have to go to their lender with a check or the keys to the property,” she said. “The result of this is you're going to see a lot of opportunity, you're going to see buyers coming out of the woodwork — as I'm seeing now.”

Last year’s rapid, consecutive interest rate hikes resulted in a 71% year-over-year drop in multifamily investment sales nationally in the first quarter of 2023.

But recent deal volume suggests that money is once again circulating in the NYC market: This week, lenders doled out four loans worth more than $100M apiece to multifamily properties, including construction loans. Nuveen just closed on a 12,000-unit acquisition of mostly New York City affordable housing buildings.

Deals that fell through last year are coming back around, as owners seek to shake off buildings with debts that might cause headaches in the near future, JLL Senior Managing Director for Capital Markets Rob Hinckley said. His team is working on almost a dozen deals that they first worked on last year, he said, and is anticipating that buyers will try to lock in acquisition loans over the next few months during multifamily’s peak leasing season.

“Owners have a reason that they need to sell, whether it's in a closed-end fund, it has that maturity, or maybe even has a creative debt,” he said. “They're deciding to hit the market sooner rather than later potentially because they think things may be getting worse.”


Pent-up demand on the lender side will match the energy from aspiring buyers, said Jeff Julien, a colleague of Hinckley and another senior managing director for capital markets at JLL. 

“As debts are coming due, we think owners are going to start to hit the sale market to take advantage of those factors and, frankly, also to take advantage of the fact that there's nothing on the market,” Julien said. “You have a captive audience right now on the buy side, where nobody's deployed capital in eight months, roughly, so it's been a pretty long period of inactivity. And that can kind of only last for so long … the capital needs to be deployed.”

Private capital is more likely to back stress-related sales, Julien said, while institutional investors are focused on Class-A multifamily properties. The failure of Signature Bank — from which roughly 80% of the loans currently in place for NYC’s rent-stabilized multifamily properties originated, per reporting from The City — is creating opportunities for new lenders to get a foot in the door.

BEB Capital has started originating bridge loans for the NYC multifamily market, Ghaytanchi told Bisnow, adding that his firm has been in touch with the team marketing some of Signature’s loans.

“Signature Bank, they really understood multifamily, particularly the rent-stabilized and rent-controlled apartments, and their absence from the marketplace will be felt,” he said. “It'll have a cascade effect on other lenders that are still in place.”

An undercurrent of concern over local politics remains present for investment sales players operating in NYC, Ghaytanchi said, adding that he's worried about additional future measures from the legislature to control rents.

The policies already in place are making it a difficult market for landlords and  renters alike. 

NYC is the most expensive rental market in the country, per national rent data released by Zumper last month. The median price for a one-bedroom apartment in NYC was $3,570, while the national median was $1,495. And while pandemic-era migration drove demand and prices in Sun Belt cities, New York was one of the five cities with the fastest-rising rents last month.

“Even for supply-constrained, high-demand markets like New York City, the regulation behind rent-stabilized apartments could erode multifamily property values,” Trepp’s April multifamily report said. “Not only would this inhibit landlords’ abilities to raise rents in the future, but landlords may also choose to let their properties deteriorate rather than invest money in repairs and upgrades if the potential returns are too low to justify the investment.”

But in the meantime, New York’s failure to pass legislation that would result in more housing production will keep the rental market highly competitive, experts said.

Interest rates are higher than some owners who have entered the market in recent years may be used to, Polsinelli said, but the city’s limited housing supply is appealing to buyers who see a chance to snap up properties to build generational wealth. 

“You're buying a commodity, and you're buying a commodity at a low point in the cycle. It's worth just accumulating that,” she said. “This is the crisis that will define the next cycle.”

CORRECTION, MAY 12, 1 P.M. ET: Keyvan Ghaytanchi's title has recently changed from BEB Capital's chief operating officer to chief investment officer. This article has been updated.