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Bank failures put squeeze on construction loans

On the surface, the recent collapses of Silicon Valley Bank, Signature Bank and First Republic Bank shouldn’t harm the multifamily sector as much as other commercial real estate asset classes.

Recent data from research firm MSCI shows that local and regional banks hold a relatively small percentage of apartment loans. Over the last decade, they have only made between 10% and 20% of first mortgage originations to multifamily borrowers. In comparison, the office, retail, industrial and hotel sectors all received a higher percentage of their loans from these lenders.

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