Multifamily Industry Still Mostly Optimistic About Future, Says Capital One

Posted on February 4, 2016

A recent survey by Capital One Multifamily Finance found that a slight majority of multifamily professionals expect their segment’s activity to increase in 2016. Namely, 51 percent of respondents believe that activity will increase in the sector this year compared to last, while 29 percent anticipate multifamily activity to remain at 2015 levels. Only 20 percent foresee a decrease in activity this year.

Many respondents also expect the lending environment to tighten. Forty-one percent said it will be slightly more challenging to get a loan in 2016, and 8 percent anticipated that it will be significantly more challenging. Thirty-six percent foresee a comparable lending environment to 2015, and only 15 percent believe the lending environment will be less challenging this year.

The surveyed real estate pros indicated a strong interest in construction financing in 2016.

Forty-one percent of respondents said that construction financing will be the most important kind to their business this year. Acquisition and refinance followed, with 28 percent and 25 percent respectively listing these types of financing as most important for 2016. Just 6 percent said lines of credit will be most important this year.

Respondents also noted a range of local market challenges in 2016. The most significant local issues identified by multifamily professionals are increased costs (35 percent); competition among buyers for deals (25 percent); and competition for high-quality sites (19 percent). Overbuilding is also a noteworthy concern, with 16 percent of respondents naming it as the most significant multifamily issue in their local market.

Capital One Multifamily Finance conducted the survey at Bisnow’s 2015 Multifamily Annual Conference in Washington, D.C., in December, examining the expectations of multifamily housing real estate professionals for the upcoming year. Percentages are based on 138 responses.