April 23, 2022 Weekly Investor Update

Life Bridge Capital Weekly Investor Update

April 23, 2022

The Latest in Commercial Real Estate (CRE), Economy & Markets




Mortgage Rate (30-Year Fixed): 5.11% (as of 4/21)


Existing Home Sales: -7.2% (February 2022)

New Residential Sales: 11.9% (February 2022)

Median Sales Price for New Houses Sold: $400,600 (February 2022)

Construction Spending: +0.5% MoM (February 2022)

New Residential Housing Starts: 1.7 million (February 2022)

New Residential Housing Completion: 1.3 million (February 2022)


Homeownership Rate: +65.5% (4Q21)

Rental Vacancy Rate: +5.6% (4Q21)


Sources: NAR, BLS, Federal Reserve Bank, MBA

Note: Rates listed are estimates and may not reflect actual rates depending on term, sponsor location, and other factors involved.



10. Growth in multifamily constructions due to higher rents

Brad Dillman, chief economist with multifamily building developer Cortland, announced in an interview with Marketplace that many builders are motivated to construct more apartments in Florida, Texas and Arizona due to higher rents in outlying suburbs and other Sunbelt states. However, supply is still unable to keep up with the surge in demand due to the ongoing shortage in labor and supply chain issues with construction materials. John Kirk, managing director of multifamily development company Embrey Partners, also emphasized in the same report that even though rents have soared, it still makes it more convenient to rent than to get into the tedious process of securing a loan and buying a house during this period.


9. Multifamily demand on a record high in Q122

Research data from RealPage indicate net demand for apartment space has increased by 8% more over the previous quarter, sitting 76% higher than its previous peak in 2000. Rent growth in new lease asks was registered at 15.2% YoY. Florida tops the markets with eight out of 10 of the largest YoY areas for rent growth. RealPage noted that the growth in apartment demand comes from young adults, but has to contend with a shortage of rental housing across the country.


8. Multifamily lenders deal with migration patterns

Geri Urgo, head of production for NewPoint Real Estate Capital, stated in an interview with Commercial Observer that the industry remains bullish on Sunbelt areas due to the influx of more renters in multifamily properties. Urgo emphasizes the migration of young workers to tax-friendly states such as Texas and Florida as a result of the pandemic. In addition, with many offices still yet to be filled with tenants, the company has observed a growth in adaptive reuse of these spaces to become multifamily rentals instead.  

7. Multifamily mortgage borrowing and lending to grow in 2023

The Mortgage Bankers Association (MBA) forecasts in its 2021 Commercial Real Estate/Multifamily Finance Annual Origination Volume Summation report that total multifamily mortgage lending will hit  $418 billion this year, down by 11% YoY. However, given the strong property fundamentals and rising property values that will support commercial real estate mortgage demand, borrowing and lending are projected to recover to $442 billion next year, along with $950 billion in total commercial real estate lending.


6.March housing starts reach 16-year high of 1.79 million

National home construction surged back in March, reaching its highest level since 2006. A total of 1.79 million constructions were recorded, boosted by multifamily projects as builders seek to meet the shortage in housing inventory. The increase in starts reflected the strongest pace of multifamily home construction since January 2020. Multifamily starts reached 593,000 in March.

5. CBRE: Rents to keep growing due to high demand for apartments

Real estate firm CBRE announced that growth in apartment rents will continue this year as demand for rental housing remains very strong. CBRE noted that in 2021, renters paid 13% higher than average rents across major metros in the country. Real Capital Analytics also observed an increase in investing on apartment properties last year, with commercial real estate investors spending a total of $335.3 billion – double what they spent in 2020.


4. More renters interested in reporting their rent payments to credit companies

A survey by TransUnion revealed that 60% of more than 2,000 polled renters are willing to have their rent payments reported to credit repositories. TransUnion explains that the findings indicate landlords can help renters build the latter’s credit profiles and scores. In addition, the survey reveals that 77% of renters are likely to pay on time if landlords decide to report their payments to credit agencies.


3. Multifamily conversions growing across the US

Hotel-to-multifamily conversions have gained momentum and have become a strategic investment option for developers during the pandemic. Vivo Investment Group has recently announced its acquisition of a 710-key former hotel in downtown Baltimore. The building will be converted into a multifamily property and will be rebranded to appeal to renters. The group plans to retain some of the hotel’s features such as rooftop pool, fitness facilities and subterranean parking. However, the meeting and ballroom spaces will be converted to coworking areas, private offices and a movie theater for residents.


2. Median monthly asking rent increased 17% YoY

Real estate brokerage firm Redfin announced that the U.S. median monthly asking rent increased 17% YoY to a record high $1,940 in March. In addition, mortgage payment increases outpaced asking rent increases in 44 of the 50 largest U.S. metro areas in March. Portland topped the metro areas with the fastest-rising rents YoY at 40%. It is followed by Austin (38%), New York (35%), New Brunswick (35%) and Newark (35%). Milwaukee and Kansas City were the only two of the 50 metro areas that had a decline in rent.


1. Mortgage rates highest in 11 years

The average rate for 30-year fixed mortgages surged to 5.11% in the week ended April 21, the highest level in 11 years. The latest rate was up from 5% a week earlier and 2.97% YoY. Sam Khater, Freddie Mac’s Chief Economist, announced that it still is a seller’s market, although buyer competition has started to become slower. The report also notes the cities with the highest March price increases YoY, which include Miami-Fort Lauderdale-West Palm Beach, Fla., (37%), Las Vegas-Henderson-Paradise, Nevada, (35%) and Tampa-St. Petersburg-Clearwater, Fla. (32%).

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