Dive Brief:

• The nation’s largest apartment owner and developer is now making loans directly to apartment owners.
• Greystar Real Estate Partners is offering senior mortgages, mezzanine loans and preferred equity financing to apartment owners and developers throughout the U.S. The Charleston, South Carolina-based firm announced on Oct. 5 that it will focus its direct financing services on the urban and suburban markets where it already has experience.
• Greystar established its credit business in 2018 and invested $1.5 billion in debt instruments collateralized by multifamily assets, said Wes Fuller, executive managing director and global leader for Greystar's Investment Management business, in a news release. But now, the company is providing financing directly to apartment owners.

Dive Insight:

Greystar is bringing its direct financing products to the market at a time when finding debt has gotten a lot more difficult for apartment owners.

Over the summer, apartment owners told Multifamily Dive that the number of lenders open for business has declined dramatically since interest rates started rising. To find financing, they have had to accept lower leverage or work harder to source bank debt. And, even when they found a lender, the closing process took longer.

Playa Vista, California-based apartment owner DB Capital CEO Brennen Degner was accustomed to receiving five to 10 term sheets before the environment shifted.

“We’ll go out to the market and we’ll struggle to get one or two groups closed in line with underwriting,” Degner said.

The lending environment may change again this fall, according to Stuart Zook, chief investment officer for Coconut Grove, Florida-based Monument Capital Management. He pointed to new entrants, like medium-sized life companies, coming into the market.

“I think we’re also going to see some debt funds come back, but I’m not 100% sure,” Zook said.

Now, those insurers and debt funds will be joined by Greystar, which will be able to tap into its operational experience as it evaluates lending opportunities.

“We are well-positioned to now provide capital solutions directly to multifamily property owners and developers by further leveraging the knowledge and experience gained from operating our integrated platform to better serve those in need of financing,” Fuller said.

Click here to sign up to receive multifamily and apartment news like this article in your inbox every weekday.