Speakers at the Connect Apartments 2026 conference in Los Angeles described a multifamily capital markets landscape defined by high leverage, uneven performance and selective opportunity. Trepp chief product officer Lonnie Hendry told attendees that the post-pandemic “tale of two markets” dynamic now extends fully into apartments, with outcomes varying widely across properties and operators even within the same location.
Hendry noted that multifamily still compares favorably with other commercial real estate asset classes on overall performance, yet a meaningful share of properties is now underwater. He emphasized that property-level results are increasingly driven by capital structure and sponsorship quality rather than simply market or asset type, saying that two apartment buildings on the same street can have very different outcomes depending on the debt stack and the operator.
During the “Capital Markets & Investment Strategy: Where the Money is Moving” session, Brighton Capital Advisors managing partner Michael Cohen framed the current period as distinct from prior downturns he has seen since starting in CMBS in 1991. In his view, this cycle is unusual because investor capital is available and lenders remain liquid. The strain in multifamily is instead rooted in leverage, with Cohen estimating that the sector is grappling with nearly full leverage on many deals.
Cohen said that buyers who acquired multifamily assets between 2017 and 2023 are generally over-leveraged in the current rate environment. He added that while lenders are not broadly forcing borrowers into distress today, they are asserting more control. Steps he cited include more frequent use of receivers, more aggressive oversight and closer scrutiny of personal recourse carve-outs as lenders look to protect their positions.
Asked whether his firm is still pursuing acquisitions, LaTerra Development managing director Chris Tourtellotte said they continue to look for opportunities but face difficulty sourcing deals that make sense. He observed that capital is primarily targeting existing multifamily assets, including newer projects that are now trading at or near their outstanding loan balances.
Tourtellotte said that current conditions are not advantageous for most sellers, but he sees what he described as generational buying opportunities emerging for well-capitalized investors. The limiting factor, he added, is the ability to identify transactions that satisfy equity return requirements in a market where values, leverage and borrowing costs are still being reset.
