Equity remains cautious and selective, but the debt markets have become increasingly competitive — especially for well-structured multifamily construction deals with experienced sponsorship.

Regional and community banks are back in the market aggressively pursuing quality multifamily construction opportunities. We are seeing bank pricing in the low-200s over SOFR, with some select executions reportedly below 200 bps over.

Debt funds remain active as well:

• Institutional-quality deals: high-200s over SOFR
• Middle-market deals: generally low-to-mid 300s over SOFR depending on leverage and structure

Recent market executions include:

• ~80% LTC construction financing around 350 bps over SOFR
• ~65% LTC financing near 335 bps over SOFR on a ~$40MM loan

The larger issue today is no longer debt availability. It is the equity side of the capital stack.

LP equity has slowed considerably as investors remain cautious about exit cap rates, valuations, and overall market timing.

As a result, developers increasingly need to rethink traditional capital stack structures.

Preferred equity continues filling part of the gap, despite pricing often landing in the low-to-mid teens.

Bridge financing also remains active across both banks and debt funds, particularly for multifamily owners navigating maturities, extensions, lease-up periods, and pre-stabilization business plans.

The bottom line:

Multifamily development has not stopped. But the projects getting done today generally have:

• Thoughtful capital stack structuring
• Meaningful sponsor equity
• Flexible capitalization strategies
• Strong lender and equity relationships

Construction lenders are open for business again. The bigger question is whether the equity side of the stack has been structured well enough to get deals closed.