• CRE Daily
  • Posts
  • Multifamily Developer Confidence Takes a Dip in Early 2024

Multifamily Developer Confidence Takes a Dip in Early 2024

Confidence in the market for new multifamily housing declined year-over-year in the first quarter of 2024.

Together with

Good morning. Market confidence in new multifamily housing dropped in Q1 2024. Plus, high interest rates and less debt availability offer unique opportunities for investors with less reliance on debt.

Today’s issue is brought to you by Agora—one solution for all your investment management needs.

Market Snapshot

S&P 500
Pct Chg:
Pct Chg:
10Y Treasury
Pct Chg:
Pct Chg:
*Data as of 5/10/2024 market close.

multifamily housing

Multifamily Developer Confidence Takes a Dip in Early 2024

Multifamily Developer Confidence Takes a Dip in Early 2024

According to the latest Multifamily Market Survey (MMS) by the National Association of Home Builders (NAHB), confidence among multifamily developers fell in Q1 2024. Yet, existing apartment owners are very positive about occupancy.

MPI: The Multifamily Production Index (MPI), which assesses developer sentiment on current production conditions, fell to 47, indicating a less optimistic outlook than the previous year. This index is crucial as a reading below 50 suggests that more developers view market conditions as poor rather than good.

By the numbers: All four of the components posted year-over-year declines:

  • Garden/Low-Rise: Declined by 2 points to 55.

  • Mid/High-Rise: Fell by 5 points to 36.

  • Subsidized Units: Dipped by 1 point to 50.

  • Built-for-Sale Units: Decreased by 3 points to 39.

MOI: Conversely, the Multifamily Occupancy Index (MOI), reflecting perceptions of occupancy levels in existing apartments, stood at 83. This indicates a slight improvement YoY and a generally positive sentiment about occupancy rates. Garden/low-rise and mid/high-rise units led the way, maintaining their previous scores and subsidized units, increasing impressively by seven points to 94.


Why it matters: Multifamily developers are grappling with higher interest rates, tighter lending conditions, and project approval difficulties. While current apartment occupancy is strong, the market could soften as a large number of new units come online. The NAHB projects a 28% decline in multifamily starts this year, indicating a slowdown in developer activity.


Simplify your fundraising process with Agora

Are you looking to take your investment firm to new heights?

Agora’s fundraising tool makes raising capital faster and easier than ever before, providing you with efficient pipeline management, public brochures, shared data rooms, customized subscription questionnaires, and the ability to collect online signatures - all within one comprehensive platform.

With Agora’s Fundraising Tool, you can effortlessly manage your fundraising process from start to finish, ensuring a seamless experience for both you and your investors.

Discover streamlined real estate investment management with Agora.

✍️ Editor’s Picks

  • Uncle G is back: Grant Cardone plans to supersize his 10X brand with a new reality TV series where he judges first-time commercial real estate investors. But does anyone care?

  • Kick-off: Investors plan to bring a $300M soccer franchise, stadium, and entertainment district to downtown Albany.

  • Big builders: Publicly traded home builders dominated the market in DFW, developing 60% of self-developed lots last year, sidelining smaller competitors.


  • Rising demand: The U.S. multifamily sector dodged the predicted overbuilding crisis. Strong demand boosted net absorption, making it the third-best first quarter in over 20 years.

  • More housing: Leo Pustilnikov proposes a studio-only multifamily development in Beverly Hills, his sixth builder’s remedy project near a future Metro line.

  • Housing demographics: On the latest New Home Insights Podcast, Chris Porter and Eric Finnigan of John Burns Research and Consulting discuss how demographics shape housing.

  • Major discount: A 359-unit apartment building on Bethesda’s Wisconsin Avenue, completed in 2016, has sold at a significant discount from its original trade.

🏭 Industrial

  • Institutional interest: Blackstone continues to double down on logistics by selling a portfolio of New York and New Jersey industrial properties for $246M.

  • Amazon is back: In Q1, Amazon leased around 6.5M SF, surpassing the 2M SF it put up for direct or sublease, marking its highest quarterly leasing since over 8M SF in Q1 2022.

  • On the defense: Equinix, the largest data center REIT, refutes a prominent short seller's allegations of misleading investors, citing an internal audit that found no merit to the claims.

  • Reshoring: The effort to reshore and expand U.S. manufacturing space gains momentum as companies seek to avoid supply chain disruptions. But forces are pushing back due to labor concerns.


  • Chop it up: The Randall family is redeveloping a former Kroger store in Conroe's River Pointe Shopping Center into multiple retail spaces due to high demand.

  • Cashing in: RCLCO Fund Advisors sold two retail buildings in Miami’s Design District at a surprising $17.9 million discount.


  • On the move: OpenDoor has moved its San Francisco headquarters for the second time in two years to a 20,400-square-foot office at 100 Montgomery Street in the Financial District.

  • Staying put: Johns Manville has renewed the lease for its 121,000-square-foot global headquarters in Downtown Denver after considering other locations.


  • Disney Resort: Tishman and MetLife secure a $735M refinancing for a Disney resort with loans from Bank of America, Wells Fargo, and Goldman Sachs amidst a travel industry rebound.

  • Turmoil: LuxUrban Hotels likely lost its franchise partner amidst a leadership shake-up, plummeting stock prices, lawsuits, and a short seller's attack.

  • Victory: The Chetrit Group won a legal battle as the Third District Court of Appeals reversed a lower court's summary judgment regarding the $45 million loan for the Tides hotel in South Beach.


High Interest Rates and Debt Crunch Will Create Unique Investor Opportunities

While loan defaults are expected to rise, many loan maturities will likely be extended to 2025 and beyond, creating a perfect storm for investors.

The looming wall: Nearly $2 trillion of the $4.7 trillion in commercial real estate loans nationwide will mature over the next three years, according to the Mortgage Bankers Association. CBRE predicts extensions for most loans, though some forced sales will occur as lenders' patience wanes or borrowers default.

Figure 1: Commercial Real Estate Loan Maturities by Property Type. Source: MBA

Zoom in: This year, the CRE market faces nearly $900 billion in loan maturities, with multifamily ($257 billion) and office properties ($206 billion) leading the pack. The cumulative effect of previously extended loans has increased this year's financial strain by $271 billion, pushing many 2024 maturities further into the future, potentially to 2025. This shift is largely a tactical move to avoid immediate defaults and foreclosures, especially in high-risk office spaces.

Figure 2: Expectations for Annual Commercial Real Estate Loan Maturities, 2022 vs. 2023 MBA Surveys. Source: CBRE

Lending landscape: Banks are tightening their belts, holding about 38% of total CRE debt with a cautious approach influenced by regulatory oversight. This constrained lending environment is ripe for private lenders and investors to provide alternative financing solutions such as bridge loans and development financing. The Federal Reserve's slow pace in interest rate reductions bolsters this scenario, prolonging the period for investment under current conditions.

Figure 3: Commercial Real Estate Loan Maturities by Lender Type. Source: MBA


Big picture: Despite the gloomy outlook for the office sector, some regions are seeing the beginnings of market capitulation, which could spell investment opportunities, especially in higher-grade properties in vibrant districts. These assets, though needing upgrades, promise substantial long-term returns. Moreover, the slow emergence of market distress is generating niche opportunities for providing strategic capital solutions, including fresh equity and acquisitions of repossessed properties needing capital improvements.


Signature Bank and NYCB were major lenders for Rent-Stabilized Multifamily properties. With Signature gone and NYCB retreating, a massive void needs filling. If no other lenders step in, a severe crisis looms for borrowers and lenders.

You can download the full report here.

Share CRE Daily + Earn Rewards

You currently have 0 referrals, only 1 away from receiving B.O.T.N Multifamily Deal Screener .

What did you think of today's newsletter?

Login or Subscribe to participate in polls.

Join the conversation

or to participate.