- Lenders have capital across private debt funds, life insurers, banks and the GSEs, but Walker says the open question is who supplies the equity to recapitalize struggling multifamily projects in 2027.
- About $1.5T of multifamily debt must be refinanced over four years, and shorter-term loans could stack even more maturities into 2029 and 2030 if borrowers use them as a bridge.
- Limited equity for new starts could produce record-low multifamily supply in the coming years, which Walker expects would push rents higher.
Debt is not the problem in multifamily. The multifamily equity gap is, according to Walker & Dunlop Chairman and CEO Willy Walker, as reported by GlobeSt.
Walker told CNBC’s Closing Bell Overtime that lenders have money to deploy, but doubts about who will supply fresh equity are complicating refinancings and holding back construction.
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Lenders Are Open for Business
Private debt funds, life insurers and banks are all lending, Walker said, and multifamily borrowers can also tap Fannie Mae and Freddie Mac, which no other property type can. Private equity firms have raised sizable debt funds too, some with insurance arms that add lending capacity.
What is missing is equity to recapitalize deals that need it. Walker called that a major unknown heading into 2027.
A $60M Refinancing Example
Walker described a borrower refinancing a $60 million loan on a property whose value has fallen 20%, with financing costs 30% to 40% higher. Many owners in that spot are turning to shorter loans, where pricing is better.
Short Loans Could Enlarge the Wall
Walker estimates $1.5T of multifamily debt will need refinancing in the next four years. He expects owners to get through the near term, but warned that swapping 10-year loans for three-year loans could pile more maturities into 2029 and 2030.
That adds to risk already visible in the CMBS hard maturities flagged for multifamily.
Starts Stall Without Equity
Walker thinks now is the right moment to start projects that would deliver in two to three years, yet he does not expect developers to move because equity is not flowing.
Office supply is already running at about 9% of its normal annual pace this year, and he expects multifamily to shift from record deliveries to record-low ones.
Why It Matters
The gap hits owners who need recapitalizations and developers who need capital to build. Debt volumes keep growing, with CRE debt reaching $5.12T, yet equity remains the tighter input.
If construction stalls now, supply will be thin later. Walker predicts that will push rents higher.
What’s Next
Two questions to watch: who supplies equity for 2027 recapitalizations, and whether owners keep leaning on short-term loans that stack up maturities in 2029 and 2030.
