Apartment Loan in

Little Rock

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Apartment Loan in Little Rock:

Since April of 2000 Caffrey & Company LLC has been helping real estate investor’s nationwide find the best loan product for commercial real estate investment properties. Call for great rates for an apartment loan in Little Rock. Caffrey & Company LLC has a special focus in Little Rock apartment loans.  The most attractive, non-recourse loans terms start at $1,000,000 for multifamily properties.  Therefore, if you are looking for low interest rates, a non-recourse loan up to 80% of value (Over $7 million leverage up to 85% is available) you are at the right place.  These specialized apartment loan products are available in Little Rock as well as suburbs including Austin, Bryant, Conway, Benton and Cabot.

Loan Underwriting:

Each loan product has unique underwriting requirements.  Above all, how the loan data is presented to the lenders can have a negative or positive impact on pricing and loan proceeds.  We offer this expert loan underwriting for an apartment building loans in Little Rock.  Therefore, this will help to achieve the best pricing and loan terms for your multifamily building or commercial real estate investment.

Free Loan Quote for Commercial Real Estate Loans in Little Rock:

We encourage our clients to submit key property level data for a free loan underwriting review.  This initial loan underwriting normally takes less than one business day for us to respond with several apartment loan options for you to consider.  Here is a short list of property level data that would aid in providing a loan quote:

Required Underwriting information needed:

  • Last two years and Year-To-Date detailed Profit and Loss statements (in addition a trailing 12-month P&L is best if available) on the apartment complex.
  • Current Rent Roll
  • Brief narrative description of the property.
  • If available a few electronic photos. Or a copy of the real estate agent’s marketing package.
  • What is the purpose of the loan? Acquisition, Refinance, cash out, re-position the property (renovations).

Next, we will need to understand your investment objectives.  How much do you wish to borrower on the apartment complex?  Is this a long-term investment or short-term investment?  In other words outline your apartment loan in Little Rock loan request.

We understand the financing of an apartment complex is a very important component of your investment.  Therefore, we encourage our client to send us details on the property before finalizing the purchase and sale contract for an indication of the type of loan that might be available to a particular property.  We can review and provide some up-front loan options.

Fixed Rate Loan Terms are Available for Multifamily Properties:

Loan terms are available from 3-years up to 35-years (40-years for new construction on loans over $7 million).  The Apartment buildings can be Garden Style, High Rise, Age Restricted, Student Housing, Section 8 Tenants and subsidize properties.  There must be at least 5-units.  If you have several buildings all with five or more apartment units that you wish to place under one loan no problem, the buildings should be within 3 to 5-miles from the other properties for best loan terms.

How long will it take to close the Loan?

The closing process normally takes between 45 and 55 days to close a Multifamily loan in Little Rock.  Closing costs vary between loan products.  Before you reach for your checkbook we will provide a detailed estimate of the anticipated closing costs.   At this stage you will know the loan product, the loan terms, and the anticipated closing costs to allow you to make an informed decision before moving forward.

Market Information for the Central Arkansas including Little Rock:

Vacancy rates decreased or stayed the same across the board from Q4 2020 to Q1 2021. Since Q1 2020, most average lease rates have increased in the industrial and office submarkets. However, half of the retail submarkets have seen decreased average lease rates.

Office vacancy rates have been on a downward trend the last two quarters. There have been fewer long-term lease renewals, but landlords have still been able to sign leases. Corporations seem to be retaining office space while employees begin to return to the office.

Industrial is still leading the pack as owners become more confident and as lease rates rise. Speculative buildings are
breaking ground this quarter and Amazon’s new facility at the Galloway exit in North Little Rock is well on it’s way to completion. These buildings are adding more available space to a market that has been lacking and enabling owners to add to their portfolios. With more COVID vaccines, we’re seeing more retailers re-opening and expanding their spaces. Lease rates have seen minimal changes or have decreased in most submarkets. Though many smaller businesses are staying the same, we’re still seeing growth in national retail tenants.

Multifamily Sales nearly sets new record in 2020:

2020 had the second highest multifamily sales volume in the last decade and we’re seeing many new sales. There are plenty of new units under construction that will be available this year.

There has also been continual new overall development in Little Rock. The demand is strong for industrial, multifamily, banking, and senior living projects. But, material pricing has gone up and has caused either delays or developers to switch materials to meet deadlines. We’re hoping the material prices level out before the end of the year.

Goodbye 2020!

As we put 2020 in the rearview mirror and finally breathe a cautious sigh of relief with COVID-19 numbers declining, the multifamily market remains strong and vibrant, both from the local and national perspective.
With the exception of the industrial market, multifamily is the juggernaut of activity across the spectrum.
As work and school from home became the norm last year and layoffs were abundant, young adults were moving home with parents in droves; however, apartments were able to weather this shifting storm. As we began 21Q1, the job market is still down but is improving, wages are on the rise, construction costs are exponentially
increasing, materials for construction are delayed, interest rates remain historically low, supply of existing homes to purchase are low, home values are sharply increasing, and there is an anticipation of a dramatic rise of inflation.
Investment capital is looking for opportunities to find attractive yields, but those opportunities are increasingly harder to find – especially in gateway markets. Thus, investors from gateway markets are buying up apartments in secondary and tertiary markets, cap rates continue to decrease, and the average price per unit is on the rise. CoStar reports that the greater Little Rock market experienced more than $340 million in apartment sales volume in 2020 making it the second highest sales volume of the decade (only 2019 brought in more). If you follow weekly  transactions in Arkansas Business, you are hard-pressed to find a week that does not include a significant multifamily transaction – usually to the tune of multi-million dollars in value. And most of those buyers are from out of state.

Value Add Multifamily Leads the demand:

“Client looking for multifamily opportunities to purchase, value-add preferred” is the steady message we hear. But there are not many opportunities on the market. Rent growth and vacancy has remained steady despite an influx of new units that hit the market over the last 15 months. 2020 saw an increase in supply of more than 1,500 units, and the absorption was much better than anticipated as vacancy rates for 21Q1 are 7.0%, according to a CoStar report. Currently there are nearly 500 units under construction that will hit the market in 2021. Additional supply will  create a squeeze on existing rental inventory. The new units coming online offer incredible amenities such as cabana pools with clubhouses, golf simulators, movie theaters, gaming hubs, poker rooms, fitness centers, etc. It’s about to become a lot more competitive for existing landlords to retain and/or recruit tenants. Older product will likely suffer some vacancy and have to get creative on their terms and incentives. At the same time, we are at a threshold of rental rates. If you can find a house to buy, your monthly mortgage including taxes and insurance will probably be comparable or even lower than your monthly rental for a luxury apartment. Home ownership is not as valuable for Generation Z and Millennials as it was for previous generations. When interest rates start bumping up to keep pace with the inflation that is expected, it will likely cause the multifamily category to be the desired choice for the foreseeable future.

New Development in Central Arkansas:

The Little Rock market continues to see new development projects underway across the MSA. Favorable lending
environments coupled with continued demand have enabled developers in our market to continue to break ground and build new projects. The sectors that have been especially robust include multifamily, single family neighborhoods, industrial (new and adaptive reuse), banking/financial locations, and senior living. The market has also seen sustained activity in quick-serve restaurants, fueling stations and service-oriented retail (health/wellness, automotive, retail medical) development.  While demand for new development projects remains strong, the main headwind item that could negatively affect development projects for the remainder of the year is material pricing. Over the last two quarters, we’ve seen an unprecedented increase in steel, lumber and PVC pricing. This increase is a result of supply chain disruptions and high demand. This disruption has caused construction costs to rise on a monthly basis and has delayed projects due to material delivery timing. We’ve seen steel jump over 15% in the last
month. Developers and contractors are having to issue purchase orders well in advance of project kick-offs in order to hit completion delivery targets. Our team has spoken to several developers who have switched building material types during design in order to hit targeted delivery dates. We are hopeful that this supply chain issue will level out by the end of the year. Investors both locally and nationally continue to seek opportunities to purchase newly constructed development projects in our market. New projects with strong lease terms and guarantors are commanding a premium price. We’ve also seen demand in 1031 exchanges into new development projects. Our team looks forward to a healthy re-opening quarter with continued demand for new development projects.

Press Release:

We closed a 155 Scattered Site Multifamily in Jacksonville, Arkansas in May 2021 through Freddie Mac.

In conclusion you find details on several loan products by following these links: Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products.  Want more details and sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site:   Multifamily Loan Interest Rates.

Keep Caffrey & Company in mind when searching for an Arkansas lender for apartment loans.  Have a question please call:  Mike Caffrey (913) 402-7077 or email: Mike@CaffreyLoans.com

On our web site you can read about specific loan products: www.caffreyloans.com/loan-products, offered by Freddie Mac, Fannie Mae, HUD/FHA, Commercial Mortgage Back Securities (CMBS) and other loan products. Want more details on sample interest rates for apartment check out Interest Rates for Apartment Loans also on our web site: www.caffreyloans.com/apartment-loans.

Have a question please contact
Mike Caffrey
Telephone: (913) 402-7077