Shifting Gears in Real Estate Finance

Unveiling the Market's Secrets from Behind the Scenes

Author

Nuvo Capital
April 11, 2024

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“The [government-sponsored entities] have traditionally focused on long-term loans, but now borrowers are demanding fixed-rate loans with five-year terms that give them prepayment flexibility. CMBS, a bit player in multifamily lending for years, is gaining traction with a product that allows borrowers to reduce the coupon rate by paying a percentage of the balance as a fee. While multifamily distress no doubt will tick up, the trendline overall is positive.”

Recent Multifamily Sales (Click to view details)

Recent Multifamily Loans (Click to view details)

Question: 

When managing a multifamily investment fund, how do you balance diversification across various properties and the need for concentration to maximize operational efficiency and expertise?

Answer: 

Managing a multifamily investment fund involves a delicate balance between diversification and concentration. Evaluate the fund's investment goals and risk tolerance to determine the appropriate level of diversification. Consider geographic diversification to mitigate risks associated with specific markets. Simultaneously, concentrate investments in markets where the fund can leverage operational efficiencies and expertise. Regularly reassess the fund's portfolio to align with evolving market conditions and investment objectives. Striking the right balance ensures that the fund optimizes both risk mitigation and operational effectiveness for sustainable long-term success.

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Navigating the Nuances of Family Office Governance w/ Mark Tepsich

In this insightful episode, Mark Tepsic, a veteran in the family office domain, shares his experiences and expertise accrued over 15 years. Beginning his career within a family office, Mark has an atypical but enriching perspective on wealth management. He delves into his role at UBS, where he assists family offices in the US and Latin America to establish and refine their governance and operational structures.

Quiz of The Week

What does "Lease Term" refer to in a commercial lease?

a. The duration of the tenant's occupancy

b. The total cost of the property lease

c. The area of the property being leased

ʎɔuɐdnɔɔo s╻ʇuɐuǝʇ ǝɥʇ ⅎo uoᴉʇɐɹnp ǝɥꓕ .ɐ

Random Tip of the Week

🧑‍💻 Study Market Supply and Demand - Before investing in multifamily properties, analyze the supply and demand dynamics in the local market. A balanced or slightly undersupplied market can lead to steady occupancy rates and potential rent growth, contributing to a more stable and profitable investment.

Current Rates (Weekly Update)

10-Year Treasury - 4.36% (⬆️.01%)

Fed Funds Rate - 5.33% (0%)

1-Month Term SOFR - 5.31% (⬇️.01%)

About Nuvo Capital Partners

Nuvo Capital Partners is a niche market-focused multifamily investment platform operating throughout the Southeastern United States. As a dedicated sponsor (General Partner), we specialize in institutional quality real estate investments within these regions. Our team comprises industry professionals with 25+ years of combined experience, ensuring expertise and market knowledge. We pride ourselves on offering a transparent investment process, providing our investors with access to high-quality real estate opportunities while upholding integrity throughout.

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