Before banks were hit with major regulations a couple of years ago, some banks started self-regulating the amount of money they lent for multifamily projects.
KeyBank’s Charlie Williams sees some parallels with the present.
“I think there needs to be a little bit of a wall with new developments. There needs to be a catch-up or a breather,” Williams said.
Though PGIM previously had construction loans on its balance sheet, it is not doing any construction loans right now, PGIM principal Anthony Tarter said.
“We’ve got a bubble of deliveries,” Williams said. “There’s still plenty of appetite with buyers and debt, but let’s take a breather and get those deliveries off the books.”
Multifamily construction is the highest it has been in a decade. Texas' four major metros (DFW, Houston, Austin and San Antonio) will deliver 60,000 units in 2017. In 2018, those metros will deliver 27,000 units, with DFW accounting for 70% of new supply, according to JLL managing director Scott Lamontagne.
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