The current market environment provides a unique opportunity for investors to secure — at scale — highly predictable medium-duration cash flows from permanent multifamily real estate debt. Liability-driven investors are likely to become increasingly interested in these loans.

The current market opportunity for investors in permanent multifamily debt

Market dynamics supportive of investment in multifamily debt during the summer months of 2023 include:

Spread widening. Driven by dynamics in capital supply and demand, multifamily mortgage loan spreads over equal term U.S. Treasuries are wide from a historical perspective (10-year loans are currently priced at a spread of about 220 basis points, compared with a historical average of 180 to 210 basis points). Locked-in attractive yield. Due to near-universal prepayment penalties, investors in multifamily debt can lock in attractive, predictable y