Loans for Apartments:
Since April of 2000 Caffrey & Company LLC has been helping real estate investors nationwide find the best loan product for commercial real estate investment properties. Call for great rates for commercial and multifamily loans. Caffrey & Company LLC has a special focus in a Denver apartment loan. The most attractive, non-recourse loan 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 $5 million leverage up to 83% to 85% is available) you are at the right place.
Multifamily 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 Denver apartment building loans. Therefore, this will help achieve the best pricing and loan terms for commercial real estate investment. 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, reposition the property (renovations).
Next we will need to know your objective, 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 loan request.
We understand the financing of an apartment complex is a very important component of the 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.
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 $5 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 the loan. Closing costs vary between loan products. Before you put any funds out 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.
Denver Multifamily Market:
Catalysts for future growth in place. Prior to the health crisis, Denver recorded strong rates of employment growth and net migration that fueled tenant and buyer demand for commercial roperties and residential units. While the metro has recorded a spike in daily COVID-19 cases since October 2020, the number of reported cases during the second and third quarters trailed primary coastal markets, allowing businesses to remain open since June with capacity restrictions in place. During this span, professional services firms were able to avoid large-scale layoffs. Tech-related companies in particular exhibited resilience, adding 7,000 positions from July 2020 to September 2020. Since, Denver has slipped into a more restrictive reopening
tier that limits office capacity at 25 percent. This mandate may slow shortterm hiring activity; however, growing tech firms are still likely to bolster payrolls via remote working arrangements. These jobs could eventually translate to office-using positions that fuel future in-migration.
Denver Continued job growth:
Dual employment segments exhibit resiliency. Denver’s tech industry helped shield the market from the impacts of the COVID-19 induced shutdown as many professionals transitioned to remote work. The strength of the sector enabled the metro to retain and recapture a higher percentage of jobs than many U.S. markets last year. The transportation and warehousing segment also expanded, benefiting from the growth of e-commerce. The performance of both industries fueled apartment demand, supporting positive absorption in each quarter of 2020. Continued job creation in these fields, vaccination efforts and the rollback of business restrictions should boost spending at restaurants, bars and entertainment venues in 2021. The improvement in leisure and hospitality-related hiring has the potential to lift demand for lower-cost rentals.
Company relocations elevate high-paying job count. Denver’s lower cost of doing business and sizable cohort of well-educated residents continue to attract organizations. Palantir Technologies,
Healthpeak Properties and VF Corp. all established headquarters in the metro late last year. Additional corporate growth is lined up as Japanese-based iSpace Inc. will set up local operations and
Vectra Bank is building a nine-story headquarters in the Denver Tech Center. When hiring, these firms may recruit from outside the market, translating to relocations and household formation
that could bolster demand for Class A units.
Denver Multifamily Outlook:
Denver’s outlook remains promising, but a third wave of COVID-19 infections continued to affect apartment demand during the first quarter; absorption lagged the preceding five-year average. However, even as residents absorbed just 323 net units, Denver continued to rank among the most active apartment development markets in the country during the first quarter of 2021 as developers brought 961 apartment units online. Industry experts also kept their eyes on Denver’s long-term potential due to the metro’s status as a major national job hub. Retail chain Home Depot, for example, announced plans in March to begin hiring for 1,700 new positions in Denver. Additionally, there were signs of the apartment market’s resiliency during this period. Occupancy only dipped 20 basis points to 94.5%, despite the instability caused by multiple waves of infections and business closings. Job recovery in the metro was also substantial during the first quarter. As of February 2021, employers hired or rehired 58% of the 199,000 jobs lost during the pandemic. That said, headwinds created by the pandemic were felt by operators. New concessions limited effective rent growth to 0.3% to $1,537 per month in the first quarter of 2021.
1Q2021 Denver Multifamily Market Report:
Prior to the pandemic, Denver’s economy was in a growth state as net migration and employment were both on the rise. This led to the a strong demand for commercial properties with investors filling that demand. However, on par with the rest of the country, Denver was forced to shutdown and unemployment soared. Denver’s tech industry and professional service firms helped the unemployment from soaring too high as the tech industry was able to work remotely and the service firms were able to avoid large-scale layoffs. While the tech and professional service industries helped soften the unemployment levels, the 25% office capacity restriction throughout 2020 limited growth in other industries as companies were tentative to higher and get back to work. With the Denver economy struggling to fully recover, this led to the supply not being able to filled throughout 2020 as vacancy increased by 6% and over half of the units delivered in 2020 being delivered in a few submarkets. In the end of 2020, Denver began to loosen restrictions which helped boost the struggling industries as 24,000 positions were added in the retail trade, transportation and utilities, and leisure and hospitality industries. The growth of the tech and transportation and warehouse industries in 2020 is expected to continue into 2021. This growth is then expected to translate into apartment demand growing throughout 2021 and is anticipated to decrease the gap between demand and supply. In addition, with restrictions loosening throughout 2021, many economic sectors are expected to grow to almost pre-pandemic levels which will continue to strengthen the multifamily market. In 2021, Denver is expected to benefit from lower cost of doing business and a large talent pool with companies such as Palantir Technologies, Healthpeak Properties and VF Corp moving to the metro over the past year and iSpace Inc. also expecting to relocate to the metro. This combination of new organizations is anticipated to boost the Class A asset market.
By the numbers:
In 2021, employment is expected to grow 2.1% with 31,900 new jobs being created. Apartment inventory is going to expand 2.2% with 6,820 new units being completed throughout the year. Renter demand is anticipated to catch up to supply and vacancy is expected to decline to 5 percent. Effective rent is set to rise 2% to $1,539 per month. Average sales price per unit increased 4 percent from 2020 to 2021 and average cap rate is expected to remain steady at 5.2 percent.
In conclusion can read about specific loan products. 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: Apartment Loan Interest Rates.
Keep Caffrey & Company in mind when searching for a Colorado 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.