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Short term loan maturities are a death sentence in a down market, which is causing major pain for sponsors and Limited Partners. Since mid-2022, multifamily prices have plummeted as high as 40%, and transaction volume is down 80%. Class C, in particular, has taken the largest beating. Currently, lenders are giving loan extensions to sponsors who can raise more money, thereby reducing their exposure. In turn, the lenders are hoping they’ll be able to foreclose at the end of the extension, and sell the properties in a better market. Brian Burke, President and CEO of Praxis Capital, has been through several cycles, and believes that 2025 will be a transition year for multifamily.
