Construction Financing Now

The commercial real estate financing climate is positively frigid right now — except construction financing. Find out why that is. Also for today: An in-depth breakdown of the largest multifamily owners in Los Angeles County amid one of its toughest markets yet for landlords.

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— Tom Acitelli, Deputy Editor

How Construction Financing Remains Resilient Despite Rate Hikes

Good luck getting anyone to lend you money to buy a property. Building one? That’s another story. Despite endless bad news — commercial real estate debt originations are down 52 percent, while the current market has 32 percent fewer lenders than it did at this time in 2022, according to a second quarter capital markets report from Newmark — there’s one segment of the CRE market that’s seen a steady flow of capital, and deal closings, this past year: construction. “It’s funny, there’s definitely more liquidity in construction lending than the market realizes,” said Geoff Goldstein, managing director of JLL Capital Markets.

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Who Owns the Most Apartments in Los Angeles?

In the radically evolving commercial real estate landscape amid rising uncertainty, multifamily assets appear to be among the best positioned to withstand any sharp post-pandemic declines. But it’s an uncertain time for Los Angeles County’s housing market and many of the 9.5 million residents within it. For one, multifamily investment activity has slowed to a crawl compared to the rapid pace of sales the past few years, prior to higher borrowing costs. In the city of L.A. specifically, investors are also dealing with the newly implemented Measure ULA, which adds an additional 4 and 5.5 percent transfer tax on asset sales of at least $5 million and $10 million, respectively. Since then, apartment property sales over $5 million have plummeted. There are also the issues of rising homelessness, high inflation, record out-migration, and more new rent controls and freezes.

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