Investment competition is building again in the multifamily sector as sellers reset pricing expectations and buyers show more consistent interest, according to a panel at Connect Midwest Multifamily Trends 2026. Speakers on the capital flow and deal dynamics session focused on how investors are adapting to a financing landscape that looks markedly different from just a few years ago.
Panelists outlined approaches to securing debt in a market where terms vary widely by deal profile and sponsor strategy. Discussion centered on how investors are handling upcoming loan maturities, with participants emphasizing the need to actively manage capital structures well in advance of deadlines. The conversation also addressed how acquisition teams are underwriting transactions, with particular attention to identifying distress and selectively pursuing opportunities where they see a clear value-creation path.
Agency lending programs drew close scrutiny from the group. Igor Zhizhin, Director at Lument, noted that the agency space has shifted, with the small balance program contracting while attention increasingly gravitates toward larger assets. He observed that sizable transactions are attracting intense competition among capital providers, creating a more favorable environment for borrowers pursuing scale.
Panelists contrasted this capital depth for larger properties with the more constrained options often available to smaller deals. The evolving agency framework is reshaping how investors think about portfolio composition, and is influencing which projects are most financeable in the current market. Speakers suggested that sponsors able to aggregate or target larger transactions may be better positioned to tap into this competitive capital.
The panel also addressed how sponsors are structuring deals to overcome current headwinds. Stratos Athanassiades, Regional Manager for Red Oak Capital Holdings, described strategies that involve pushing leverage higher when a business plan includes a near-term value creation component. In some cases, structures may reach 85% to 90% of loan-to-cost when there is a credible path to quickly increasing value and paying down portions of the capital stack.
According to Athanassiades, this approach can effectively substitute for a portion of the equity at pricing that is lower than what many sponsors would otherwise pay for true equity capital, provided that the business plan performs as expected. Panelists underscored that careful underwriting and realistic assumptions remain critical in such higher-leverage strategies, particularly given ongoing uncertainties in the broader capital markets environment.
Throughout the session, speakers emphasized that multifamily investors must be precise about matching capital sources with deal risk profiles while remaining alert to signs of distress. As competition returns and capital selectively deepens around certain asset sizes and business plans, the panel indicated that disciplined structuring and early engagement with lenders are becoming central to executing multifamily transactions in 2026.
