Twice a year, we poll our investment sales advisors and mortgage bankers to see what is trending in the multifamily industry. This year, our 2022 Mid-Year Powerhouse Poll provided key insights that are more crucial than ever as we support our clients while they navigate the ever-changing commercial real estate (CRE) landscape. With our teams’ input, we’re able to help our clients set priorities and align investment strategies for the remainder of the year.
Multifamily demand continues to outpace supply
Despite market uncertainty, multifamily demand continues to outpace supply and exceed expectations with the sector experiencing an increased demand from investors, regardless of rising interest rates and inflation. The CRE industry has shown resiliency, proven by the high and stable demand we are seeing from investors and renters alike. Further, our strong mid-year production numbers demonstrate the market’s strength – with Berkadia securing $19 billion in total loan production across 932 loans and completing $13 billion in total investment sales volume across 346 total investment sales transactions in the first half of 2022 alone.
Regional trends
A new focus of the 2022 Mid-Year Powerhouse Poll was obtaining regional data by asking our investment sales advisors and mortgage bankers across the U.S. to share insights about trends they’re seeing in the local markets where they operate. For example, producers in the Southeast have seen an increase in investor demand with 38% reporting a sharp increase and 41% reporting a moderate increase. In comparison, 30% of producers in the West reported a moderate decrease, and 10% reported a sharp decrease in investor demand.
By having our producers share insights specific to their local market, we are able to pinpoint and differentiate key findings by region based upon the impact of rising interest rates and inflation, investor and renter demand and property supply.
Technology accelerates production
To meet investor and industry demand, the CRE industry continues to prioritize advancement in technology. New and innovative technology expedites the production process by giving our producers access to market-specific data and the ability to update valuations, underwrite loans, conduct rent roll analysis and more at an accelerated pace.
Opportunities for institutional investors
Growing in importance and popularity among institutional investors is the integration of ESG within portfolios. Berkadia professionals said that investment properties are being used to meet ESG metrics (44%) or properties are being converted to comply with energy-efficiency policies (20%). Additionally, institutional investors are increasingly interested in Single-Family Rental and Build-For-Rent (SFR/BFR) properties, as two of the largest renter demographics (Millennials and Baby Boomers) continue to move away from major metropolitan areas to seek the comfort of a home without the burden of homeownership.
As you can see, our insights from the first half of the year are robust. To see more key findings from our survey, read the full report here, you won’t want to miss it! To sum it up, we remain optimistic and excited about the multifamily industry. Through the remainder of the year our goal remains the same, to help clients build and manage their robust portfolios and support them in achieving long-term success through integrated investment strategies.