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    Mezzanine lending will pick up speed

    The mezzanine lending space will be more active this year, especially for recapitalizations, rescue capital and ground-up construction loans. There is a lot of mezz and pref equity ready to be deployed. However, the recent decline in property valuations due to higher interest rates, increased expenses and the slowdown in rental growth poses a significant challenge for those seeking to refinance maturing loans. The diminished appetite among investors to inject equity into projects this year is likely to further impede sales and new development in the short term. More

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    Lenders are dipping their toes back into SFR and BFR lending

    Expect an increase in available capital for single-family rentals (SFRs) and build-for-rent communities this year. Construction financing will be accessible for strong projects backed by well-capitalized sponsors. There is a big push nationwide toward renting versus buying, which makes lenders and equity providers confident in the space, as this is leading to a significant demand from consumers. Supply has slowed because of financing constraints and less new product has been built over the last few years. More

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    Retail is now becoming a favored property type

    Retail borrowers will see more available capital as lender appetite will be stronger this year. Many point to retail as a top asset class since multifamily and industrial both face some hurdles. Lenders are confident in the fact that rents have been up across the board. Retail has seen an increase in rents and decrease in vacancies, along with massive demand. There is also limited new supply entering the market. Grocery-anchored centers will continue to see the most attention, although watch for lenders to start looking at other retail properties this year. More

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    Multifamily owners will see more available capital

    Multifamily lending will be more borrower friendly during the second half of the year as rates start to come down. Lower rates will help spur activity and simultaneously reduce the impact of the large pool of loans set to mature with current rates at least 1.5% below the current interest rate environment. Look for a continued focus on strong sponsors and well-performing markets, with the agencies reclaiming their historical market share levels. While banks and life companies will be some of the most attractive options, CMBS lenders will become more popular because of decreased spreads. More

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