What’s going on in multifamily lending is a challenge and both borrowers and lenders are trying to adjust. In an interview with GlobeSt, CEO Edward Ring explained current financing hurdles and how New Standard Equities is changing its strategies.
“Everything that can pencil to today’s debt yields that lenders are requesting means that we’re effectively 50% or 55% leverage, which is missing the mark on some of our assets that went through the pandemic eviction moratoria cash shortfalls,” Ring commented. “Assets weren’t performing. On some of our properties, it’s fine. On some it’s challenging to get to the level of debt we need to finance or make it pencil for the equity yields.”
New Standard Equities typically passes on bank financing for non-bank entities “because we refer to borrow on a non-recourse basis and banks usually have a recourse component,” Ring said. “We have had banks in the past, but sometimes banks get caught up in their own portfolio problem and wind up pulling back from credit, like now. For example, a bank loaded with office-related loans probably won’t be too interested in financing multifamily.”
Ring added that he’s also seen “lenders trying to stretch, trying to make it palatable for whatever the borrower is trying to do. However, they will add terms like interest rate floors so they can consider their own cost of money when making a variable-rate loan. It’s matching that capital to the business plan and having some certainty around what the cost is.”
He noted that it appeared the industry was caught off guard. “Not that interest rates moved but so much happened so quickly. I think most people expected 200 to 300 basis points and this was a 500-basis point movement that was too much to bear too quickly.”
Read the full GlobeSt.com article here.
In partnership with the Asia Society of Southern California (ASSC) and UCLA Anderson Forecast, CEO Edward Ring spoke on the panel “Transpacific Residential Real Estate Horizon: Insights and Innovative Strategies,” offering his expert perspective on investment and management of residential properties in urban areas in the U.S. and Asia. The program examined the ever-evolving world of the residential real estate industry, including multifamily residents, value-add strategies, workforce housing opportunities, the rental market and transportation infrastructure.
The panel was held on September 26, 2023, at the Marion Anderson Hall UCLA Anderson
School of Management.
New Standard Equities COO Julie Blank joined the Multifamily Insights podcast to share her strategies and advice on effective operations, key considerations for investors, construction management and asset management, navigating the real estate industry and much more.
“I think it’s important that you as an investor or you as the owner stay involved in a weekly update on the business strategy, execution and where you are, and that should really come from your asset manager,” Blank said.
Listen to the episode “Best Practices to Manage Properties, Construction & Assets” here.
COO Julie Blank speaks on the Women’s Small Group Meeting panel at the IMN 6th Annual Middle-Market Multifamily Forum (West) addressing inherent challenges, success stories, mentorship, career & personal balance and leadership topics geared toward women in multifamily real estate.
With a program uniquely targeted to small and mid-sized owner/operators, the conference offers a deep dive into all of the issues, opportunities, strategies and trends impacting multifamily investors.
The conference is held September 19-20, 2023, in Carlsbad, CA at the Park Hyatt Aviara Resort. Learn more here.
With piqued interest in outdoor living, multifamily property owners curate amenities for a building based on location and a community’s needs, and these amenities depend on many factors: the property’s size, location, configuration and more. New Standard Equities Founder & CEO Edward Ring spoke with Realtor Magazine to discuss trends in multifamily amenities and NSE’s approach to adding property amenities that will attract tenants and provide greater ROI for investors.
Read the story here.
CEO Edward Ring joined host Brandon Sedloff on The Distribution podcast to discuss how CEOs can use operational efficiency initiatives to manage costs; why New Standard Equities (NSE) believes in cross-functional training for employees; and what tools Ring uses to steer NSE through the current economic environment.
The Distribution by Juniper Square talks with industry experts, thought leaders and some of the biggest names in commercial real estate, venture capital and private equity, for open and honest conversations about what’s happening in the private markets.
Watch the interview here.
Listen to the podcast episode here.