PEI Private Real Estate examines the growth of non-agency multifamily lending through perspectives from commercial real estate credit managers. The article discusses how refinancing constraints, uneven property performance across markets and demand for more flexible loan terms are expanding the role of alternative lenders.
Axonic’s Partner and Co-Chief Investment Officer, Matthew Weinstein, notes greater borrower acceptance of non-agency financing and an improvement in the quality of loans Axonic is seeing. He highlights the importance of closing timelines:
“Today, there is an acceptance that the agency process can be long and onerous, especially if there is a hard closing deadline or maturity. The time drag is very real and a risk to a borrower.”
Weinstein also explains that when interest rates are elevated, debt service coverage ratios often constrain loan proceeds more than loan-to-value ratios. This creates room for alternative lenders to provide loans in the high-60s to low-70s percent loan-to-value ratio, with an equity cushion beneath them and valuations that have reset.