My team's rallying cry in 2024 is Urgency. Perfecting. Optimizing. Our advantage is urgently acting on the right deals while maintaining discipline and deal control. We're focused on providing best execution by perfecting the point of sale. And finally, optimizing the cap is about balancing risk, mission and economics. 

Recent Market Activity

In terms of the market, there’s an acquisition bottleneck that hasn’t yet released. Historically in January, our acquisition sign-ups have been at 40%, and this year they’re at 25%. Until the bid-ask spread narrows to a healthy margin, we’ll continue to see some sellers stay on the sidelines. In 2024, so far, over half the deals we've signed up have been 5-year fixed. Many believe that rates need to be 3.5% or below to unlock the flow of business — which conflicts with the “higher for longer” sentiment we’ve been hearing about. 

Our Approach – Keeping It Level

Despite the rollercoaster of Treasury movements in 2023, we made a concerted effort to be consistent in our credit posture to avoid big swings that cause Freddie Mac and Optigo® misalignment. Our strategy hasn’t changed. We’ll continue to respond to market conditions in a level and balanced way. 

There’s a lot of buzz from sponsors about maturing bridge assets that have not achieved stabilization. In many instances, these assets need new, experienced operators and fresh capital, which has led to interest in our Lease Up offering. We’re looking for opportunities in supply-stable markets with a clear path to stabilization post close. 

We've also seen increased interest in several other offerings/features — including Workforce Housing Preservation, 35-year amortization, buy-downs and Long-Term Facilities

At recent conferences, we heard sponsors are paying particular attention to operations to protect net operating income growth, as expenses increase and rent growth slows in many markets. Insurance costs are still on their radar, but concern of another double-digit increase is subsiding. 

Let me end with the way I started: Urgency. Perfecting. Optimizing. When we all hear, believe and execute this, our partnership will move the needle to provide stability and liquidity across the multifamily market. We look forward to working with our lenders, borrowers and investors throughout 2024 to get deals done — both affordable and market rate — and to achieve our goals as we drive business forward.