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- Analyzing 2023's Defeasance in Real Estate
Analyzing 2023's Defeasance in Real Estate
Unveiling the Market's Secrets from Behind the Scenes
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"Although mortgage rates began to normalize in late 2023, higher-for-longer rates reduced commercial real estate sales volume and the appeal of refinancing [and defeasance]. Overall defeasance activity was slightly greater in the first half of 2023, with the highest monthly amount in May at $1.7 billion. With about $6.4 billion of defeased loans in 2023, multifamily continued to dominate defeasance, though its volume was down from $21.8 billion in 2022. Meanwhile, among non-multifamily property types, defeasance volume tumbled 52% to $5.0 billion in 2023 from $10.3 billion in 2022.”

Recent Multifamily Sales (Click to view details)

Recent Multifamily Loans (Click to view details)

Question: When structuring lease agreements for multifamily properties, how do you strike a balance between providing tenant flexibility and ensuring the stability of rental income for long-term financial planning? | Answer: Structuring lease agreements for multifamily properties requires a strategic balance between tenant flexibility and stable rental income. Consider offering lease terms that align with market preferences, such as shorter leases for tenants seeking flexibility and longer-term leases for stability. Implement rental increase mechanisms that account for market changes and property value appreciation. Regularly reassess lease terms to adapt to changing market conditions and tenant demands. This balanced approach ensures both tenant satisfaction and a predictable, stable income stream for effective long-term financial planning. |
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From Wall Street to Family Wealth w/ Ronald Diamond In this podcast episode, we delve into the world of family offices with expert Ronald Diamond. Ronald shares his journey from witnessing Drexel Burnham's collapse to founding his own hedge fund and eventually shaping the family office space. He offers insights into the challenges of managing wealth across generations, the importance of trust and relationships in investment, and the future trends in family offices. With a focus on his hands-on experience and practical advice, this episode provides a deep dive into the mechanics and strategies of successful family office management, offering listeners actionable knowledge from one of the industry's veterans. |
Quiz of The Week
What does "CAMREC" stand for in commercial leasing terms?
a. Common Area Maintenance Reconciliation
b. Commercial Asset Management Report
c. Capital and Maintenance Rental Estimate Comparison
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Random Tip of the Week
📝 Analyze Rent Roll and Historical Data - Before acquiring a multifamily property, carefully review the rent roll and historical income and expense data. Understanding the property's rental history and financial performance helps you assess its potential cash flow, identify trends, and make informed investment decisions.
Current Rates (Weekly Update)
10-Year Treasury - 4.23% (⬇️.07%)
Fed Funds Rate - 5.33% (0%)
1-Month Term SOFR - 5.33% (⬆️.01%)
About Nuvo Capital Partners
Nuvo Capital Partners is a niche market-focused multifamily investment platform operating in the Southeast. 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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