August 2026 Multifamily Financing and Investing Webinar
Every month, Old Capital's James Eng hosts a financing and investing webinar to take the pulse of the multifamily market. This month's theme was a single word: inflection. Are we at the bottom of the cycle, the beginning of the next one, or still grinding through the pain? Here's James's full read on where we stand, backed by DFW transaction data, foreclosure trends, supply numbers, and the latest lender and operator earnings calls.
Which side of the bottom are you on?
James opened with the classic market-cycle curve, the emotional roller coaster from euphoria to despair and back. The peak euphoria was the back half of 2021 into 2022. Since then, the market has slid down through 2023, 2024, and 2025, and now sits in 2026. The hard truth about the bottom, he noted, is that "you really don't know the bottom of the market until you pass it, and usually once you're way past it."
So where are we? It depends on who you ask. People on the fearful, left-hand side point to real headwinds: foreclosures still coming that will pressure pricing, negative leverage on deals bought at 5 to 6% cap rates with 6 to 7% interest, ongoing negative lease tradeouts and concessions in Dallas, and the 10-year Treasury climbing 50 basis points since his last webinar.
But people on the hopeful side see reasons for optimism: it's now more expensive to buy a house than to rent a Class A apartment, supply has peaked and is leasing up with little more coming (one of the few things you can actually predict in multifamily), there's less equity but plenty of debt available, and buyers can purchase below replacement cost, historically a great entry point.
James's own read: the Class C space is still on the left-hand side, with more deals that have to trade and flush through the system. But much of Class A may already be past the bottom.
Four themes shaping the market
James ran his whole deck through ChatGPT to pull the big themes, and landed on four:
Pricing has reset, and lenders are now taking discounts. The biggest development is lenders accepting a discount to their original loan balance, sometimes 15%, sometimes 40% or more. That's finally clearing deals.
Liquidity is returning. Agencies and bridge lenders both have plenty of money, though they're focused on larger, Class A deals.
The stress is concentrated in B and C. There haven't been many Class A foreclosures. The distress is mostly on bridge loans originated in 2021 and 2022.
Renewals are strong, but new leases are hard. Concessions, new supply, and tenants trading up are forcing C-class properties to compete with even deeper concessions.
DFW is slower, but still moving
The market "feels" slow, but James offered a good analogy: if 2021 and 2022 were going 100 miles an hour, today is more like 50. It feels slow by comparison, but you're still moving at 50.
The data backs that up. Year to date (roughly January through August), about 104 DFW properties sold, totaling around 25,000 units. The majority were A and B deals, with less C-class trading.
The deals fall into buckets. Some qualified for agency or life-company financing, stabilized properties around 90% occupancy that took a 5 or 7-year Fannie or Freddie loan. Others were distressed and needed a bridge loan to happen. As James emphasized, "understanding the financing right from the beginning, whether it's a listed deal or off-market, is key right now," because it's driving pricing. Distressed deals are pulling down the pricing of clean, stabilized deals, though value-add and REO deals require building in capex and interest carry that buyers didn't have to worry about back in 2015 to 2019.
The reset in real numbers
James walked through actual deals, comparing the seller's old loan to the new buyer's loan (sourced from Yardi):
152 units, East Fort Worth: Bought in 2022 with a $12.8 million loan. New buyer in May: $8 million.
Costa Valencia: A $12 million loan in 2021, resized to $9.5 million, often with the same lender.
Others moved from $12.9M to $12.1M, and $10.7M to $8.7M, on new bridge loans. One went up, $6M to $7M, likely because capex was rolled in.
Tuscana: A well-occupied deal that qualified for a Fannie Mae loan at about 5.5% fixed.
South Point (northeast Dallas): An REO deal.
The pattern: lenders are financing their own deals, bringing in a new buyer through a listing or by calling GPs directly and saying, in effect, "buy it for the loan amount and we'll give you 85% financing."
The foreclosure pipeline
Foreclosures are today's activity and tomorrow's listings. In Dallas, James counted about 23 foreclosures that have actually happened. Looking at eight of them, nearly all were debt funds and non-recourse bridge loans, where the maturity came due or the deal was on floating rate at higher leverage.
A couple were Fannie Mae takebacks, and the reason is important: Fannie generally isn't foreclosing over non-payment. It's foreclosing over the condition of the asset. On a loan from 2018 or 2019, Fannie's annual inspection may flag life-safety issues and deferred maintenance, trigger a stricter property condition assessment, and require the owner to put up additional money. If the owner can't, they can get foreclosed on. Fannie's delinquency rate is inching up, higher than you'd expect, though not dramatic.
Why renters are staying put
On the demand side, James highlighted the single biggest driver for apartments: the gap between the cost of owning a home and renting an apartment is the widest it's been since tracking began in 2005, close to $1,200 a month, versus under $500 back in 2015 to 2018. Higher rates hurt multifamily owners, but they've also made buying a house far more expensive, which keeps Class A renters renting. On their calls, Camden and MAA noted that only about 10% of their move-outs are going to buy houses, an all-time low.
Supply is finally rolling over
This is what everyone has been waiting for. Deliveries peaked around 150,000 units per quarter, close to 600,000 units annually in 2024. That's now down to about 75,000 units in the second quarter, one of the lowest readings in a while, and roughly back to the healthy supply levels of 2015 and 2016. As these units get absorbed, the hope is that concessions come off the A product first, then the B product, and the market stabilizes.
Rent growth tells the supply story by market. San Francisco and San Jose lead the country, largely because they saw little new supply. The high-supply Sun Belt markets are still negative year over year: Dallas around -3%, Houston roughly -4%, Austin down 5 to 6%, and San Antonio also negative. Concessions are heaviest in the South and, by class, heaviest in Class C.
Renewals are everything now
The operating math has flipped. Typical new lease tradeouts are running around -3%, while renewals are up 3 to 4%. That makes keeping your existing tenants the whole ballgame for protecting NOI. Back when tradeouts were +15 to 20%, losing a tenant wasn't a big deal because the replacement lease jumped. Today, as James put it, "renewals are everything in terms of keeping your NOI in place."
What the lenders said
James summarized several recent earnings calls:
Arbor, which was doing roughly $1 billion a month in bridge loans in 2021 and 2022, said sentiment is poor with rates up, and nobody wants to refinance or buy at this level, though that can change fast. About 3% of its Fannie book is delinquent (low compared to its bridge book). On the bridge side, its "legacy portfolio" of 2021-22 loans is about $5 billion, with roughly $1 billion delinquent or in REO, and it anticipates four to six quarters to resolve. Its current strategy is telling: rather than take assets back and pour in capital, Arbor now often forecloses and sells almost the same day to a new buyer, providing 75 to 85% of total capitalization so the buyer's financing doesn't fall through. It doesn't want to build a big REO portfolio; it wants operators who will execute the business plan.
Walker & Dunlop, a major Fannie/Freddie lender, noted everyone is on delay unless they have to act. On why the agencies ask so many questions: the firm had deals where borrowers forged documents around financials, purchase price, or balance sheets. When that surfaces, Fannie and Freddie investigate and take deals back, and 95% of Walker & Dunlop's losses came from these fraudulent sponsors. Its overall agency book, by contrast, is healthy, with delinquency of just 28 basis points.
NewPoint (an agency lender acquired by Franklin BSP) echoed the sentiment: deals are taking longer, less agency volume because of rates, and a shift toward newer-vintage bridge investments. It's getting beaten on spread, agency runs about 150 over Treasury while bridge might be 250, and it won't chase deals down to levels that don't compensate for the risk. One watch-list deal was a 2021 origination where a new borrower was brought in and still couldn't execute after a year, a reminder that being the first buyer in can mean being too early.
The common thread on lender competition: they can compete on price, on proceeds, on structure (allowing assumptions or pref equity), or by being more aggressive on underwriting, because there are a lot of bridge lenders fighting for deals.
What the operators said
On the operator side, James focused on Camden and MAA, both Sun Belt-heavy. Camden made its biggest sale in a while, roughly $1.6 billion, selling all of its California properties and redeploying into Sun Belt markets (Atlanta, Orlando, Nashville, Dallas, Phoenix, Tampa, Charlotte) plus share buybacks, citing California's regulatory environment and slower growth. Its quarter showed new leases at -3.3%, renewals at +2.8%, a blended -0.2%, and about 40% turnover.
The most interesting exchange was about future rent growth. With rents essentially flat across 2024, 2025, and 2026 at the A level, an analyst asked about "hockey stick" growth. The executive wouldn't promise 20%, but pointed to history: after being down about 5% in 2009-2010, the years 2011 through 2019 averaged around 4% rent growth (a low of 3%, a high of 6.5%). His bet is that once the supply glut clears, similar growth returns. James's take: nobody is underwriting that today, so if a deal works at 1 to 2% growth, great, with the upside being 4% in 2027-2028.
On acquisitions, Camden and MAA are trading out older 1980s and 1990s assets around a 6 cap and buying newer (2000s and up) at mid-4s to 5. Expense growth ran about 2%, though they're still giving concessions of 8 to 10 weeks in a market like Charlotte.
Financing options right now
James closed with where financing actually stands. Back at the spring webinar, everyone expected a rate cut, the 10-year was in the low 4s. It has since run to about 4.7%, with a possible Fed hike on the table, making refinances and closings more challenging. Buyers now have to build that in, and sellers are increasingly accepting that this may be their best price.
Banks: Starting at prime (6.75%), down to about 6.25% for strong clients or assets, so roughly 6 to 7%, close to agency. Expect a shorter 20-to-25-year amortization, recourse, and possible deposits, but faster 30-to-45-day closings. Still the go-to under $3 to $5 million.
Freddie Mac: SBL is gone, so Freddie is focused on larger deals but can still do $2 million and up. It's behind on its caps and will lean in, with thin spreads over Treasury. Even with the 10-year near 4.6 to 4.7%, a buydown can get you into the 5.5 to 5.75% range on larger deals, with smaller deals in the sixes.
Fannie Mae: Still very active. The Tuscana deal was 75% leverage, 7-year fixed, 4 years interest-only, around 5.5%. Expect 45 to 60-day closings and plenty of capacity.
Non-recourse bridge: More Class A deals are going bridge than usual, given where Treasuries are, with some borrowers choosing floating rate and buying a cap.
Key Takeaways
This is an inflection point. Class A may be past the bottom, while Class C likely has more distress to flush through.
Lenders are taking discounts. Cuts of 15% to 40%+ on original loan balances are finally clearing deals.
DFW is still transacting, about 104 properties and 25,000 units year to date, mostly A and B.
Renewals are everything. With new lease tradeouts around -3%, keeping tenants protects NOI.
Supply is rolling over, from roughly 600,000 units in 2024 down toward 2015-16 levels, setting up better rent growth in 2027.
Debt is available across the board, banks under $5M, Fannie and Freddie for larger and stabilized, and bridge for higher-leverage plays.
The bottom line
James's message was cautiously optimistic. The distress is real and will take another 12 to 24 months to work through, especially in the B and C space. But pricing has reset, supply is finally slowing, renters are staying put, and debt is plentiful. For disciplined buyers, this is shaping up to be the reset the market has been talking about for years, and the entry point may be here for those willing to underwrite conservatively and hold for the long term.
Looking at an acquisition or a refinance and want it sized up? Reach out to the Old Capital team at oldcapitallending.com, and join the next monthly webinar for the latest market read.