Value-add deals are expected to gather momentum next year as financiers get more comfortable with—though stopping short of trending rents—the prospect of rent growth.
The value-add trend started in the best markets and with the largest developers over the past year. But it’s only a matter of time before secondary markets and middle-market developers can freely access the capital to renovate.
For lenders, it’s still a cautious enterprise—the per-unit dollar amounts being offered are relatively modest. In many ways, curing deferred maintenance has become the new value-add. But as fundamentals continue to improve, the prospect of healing an underperforming property is an increasingly viable play.
Read more...Freddie Readies ARM For Value-Add Deals - Debt - Multifamily Executive Magazine
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