Reno Multifamily Loans in 2024
At Select Commercial, we specialize in Reno apartment building loan financing. Our team is dedicated to offering the most competitive rates and tailored solutions for multifamily investments in the area. If you're interested in a multifamily loan outside of Reno, be sure to check out our Nevada multifamily loans page. For comprehensive rates on all loan products available across the 48 states, visit our commercial mortgage rate page, where we offer competitive rates for loans starting at $1,500,000. Explore our insights on the 2025 Reno multifamily loan market.
Reno Multifamily Loan Rates - updated 11/21/24
| Multifamily Loan > $6Million | Get Free Quote | ||
|---|---|---|---|
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.51% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.52% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.50% | Up to 80% | |
| Multifamily Loan < $6Million | Get Free Quote | ||
| Loan Type | Rate* | LTV | |
| Multifamily 5 Yr Fixed | 5.95% | Up to 80% | |
| Multifamily 7 Yr Fixed | 5.90% | Up to 80% | |
| Multifamily 10 Yr Fixed | 5.89% | Up to 80% | |
Reno Multifamily Loan Benefits
Reno Apartment Loan rates start as low as 5.51% (as of November 21st, 2024)
• A commercial mortgage broker with over 30 years of lending experience
• No upfront application or processing fees
• Simplified application process
• Up to 80% LTV on multifamily financing
• Terms and amortizations up to 30 years
• Multifamily loans for purchase and refinance, including cash-out
• 24 hour written pre-approvals with no cost and no obligation
Our Reviews
2025 Reno Multifamily Loan Market Overview
As the Federal Reserve initiated rate hikes in 2022, the apartment and Reno multifamily loan markets transitioned from rapid growth to a more restrained environment. By late 2024, signs of stabilization emerged; however, the outlook for 2025 remains cautious. Select Commercial Funding continues to monitor conditions closely, especially as higher Treasury yields and tightening financial conditions shape the landscape for apartment and Reno multifamily loans.
Sales Market Recovery with Caution
Following a prolonged decline in sales volume and values, the apartment sales market has shown signs of thawing, though challenges persist. The Federal Reserve's September 2024 rate cut initially sparked renewed activity; however, the 10-year Treasury yield has risen to 4.469% as of November 5, 2024, adding uncertainty. While some sellers are accepting price adjustments from 2021 highs, higher borrowing costs could temper momentum. We are carefully evaluating Reno multifamily loan opportunities as these dynamics evolve.
Debt Financing and Access to Capital
Improved financing conditions in mid-2024 allowed for a slight easing in apartment financing, as reflected in NMHC's survey where respondents reported better availability of debt options. However, with the 10-year Treasury yield climbing, access to affordable financing remains a concern. We offer a range of multifamily loan products and Reno apartment loans, helping clients navigate these complexities amid fluctuating debt markets.
Apartment Demand in a Shifting Labor Market
Apartment demand continues to benefit from a stable labor market, though recent economic indicators highlight potential headwinds. The ongoing retirement of Baby Boomers has created opportunities for younger generations, but elevated borrowing costs may constrain affordability. Despite these challenges, Select Commercial Funding has observed steady interest in Reno apartment loans and multifamily loan options, reflecting the need for housing solutions that adapt to changing labor and economic conditions.
Absorption Rates and Occupancy Projections
High demand for apartment units has driven strong absorption rates in 2024, and while forecasts suggest continued demand, the rate of absorption may moderate if borrowing costs remain high. Moody's projects that 2025 will remain a relatively strong year for demand, yet caution may prevail in high-supply areas. We are prepared to support clients in navigating multifamily loan needs, especially in a potentially tempered demand environment.
Operational Efficiency Amidst Rising Costs
As supply increases in certain regions (such as Downtown Nashville, Austin, Seattle, and Charlotte), effective management and strong branding will be essential to attract residents. We recognize that rising operating costs could impact net operating income (NOI), particularly in light of constrained financing conditions. In this environment, properties facing operational challenges may present opportunities for experienced buyers who can optimize performance with apartment loan options.
Outlook: Gradual Stabilization Amid Interest Rate Pressures
While the initial outlook for 2025 was optimistic, higher Treasury yields have introduced caution to market expectations. With interest rates still elevated, a more gradual stabilization may unfold. Select Commercial Funding remains focused on supporting investors with a variety of Reno multifamily loan options to help manage in this dynamic market, where success will likely favor well-prepared, flexible operators.
Reno Apartment Loan - Rental Information
As of October 2024, the average rent in Reno, NV is $1,427 per month, which is 8% lower than the national average of $1,556. The rental market shows an increase of 3.1% from last year, averaging $44 more per month.
When renting an apartment in Reno, you can expect to pay about $1,084 for a studio, $1,427 for a one-bedroom apartment, and around $1,732 for a two-bedroom apartment. For larger families, a three-bedroom rental averages $2,266 per month, making a Reno apartment loan an appealing option for prospective buyers.
Most rental prices in Reno fall between $1,001 and $1,500, suggesting that a Reno apartment loan could be beneficial for renters looking to invest in this growing city.
2024 Reno Multifamily Loan Market: Notable Rate of Household Formation Generates Renter and Investor Demand Across Property Tiers
Net Absorption Overtakes Supply Additions After Record Completions
The outlook for Reno's rental sector remains positive as the metro ranks among the nation's fastest-growing markets. Household formation will increase by 2.3 percent in 2024, ranking Reno in the top five major U.S. markets. This rapid pace of formation will coincide with reduced apartment deliveries, supporting the absorption of last year's record completions. Existing Class B and C properties will benefit from this trend, and the vacancy rate of Class C units is positioned to drop below its long-term average. Moving beyond 2024, economic growth driven by expansions at the Tahoe-Reno Industrial Center will sustain a steady inflow of new residents. Over time, Class A and B vacancies should return to their historically low averages, enhancing the potential for Reno apartment loans and Reno multifamily loans.
Investor Activity: High-Growth Market Attracts Diverse Buyer Pool
Reno's growth projections and mean price point of $225,000 per unit attract out-of-state investors, especially from California. The market offers a diverse mix of sub-30-unit and larger properties, appealing to private and institutional buyers. Midtown Reno and the Wells Avenue neighborhood are potential targets for private investors, as they offer low rents, limited new supply, and strong upside potential. Institutional groups will focus on the suburbs, where access to major highways is convenient. South Reno's consistent positive absorption makes it attractive to buyers, further driving interest in Reno apartment loans and Reno multifamily loans.
2024 Reno Multifamily Loan Market Forecast
- EMPLOYMENT: Employers will add 3,000 new jobs in 2024, driven by industrial sector growth. Retail trade and transportation will contribute to demand for Class B and C units.
- CONSTRUCTION: The rental stock will grow by 2.3 percent in 2024, following a 10 percent expansion over the past two years. The Ballpark Apartments, adjacent to Greater Nevada Field, is the largest addition this year.
- VACANCY: For the sixth time in seven years, net absorption will surpass 1,200 units, lowering the year-end vacancy rate to 5.7 percent.
- RENT: Compression in vacancy will drive rent growth slightly below the long-term average. At $1,600 per month, Reno's effective rent will be $100 above Las Vegas' mean.
- INVESTMENT: Strong household growth and vacancy compression keep Reno in the top 20 markets. Rentals near the University of Nevada may attract more investors, with 21,600 students enrolled last fall and further growth expected.
Latest Expert Insights from Stephen A. Sobin
Stephen A. Sobin, the president of Select Commercial Funding LLC, is a renowned expert in the field of multifamily financing. His insights and perspectives are regularly sought by leading industry publications. Here are his latest contributions that highlight his deep understanding of the multifamily financing landscape and his commitment to providing clear, insightful analysis on key industry issues.
Persistent Inflation and Its Effects on CRE
In an article featured in Multi-Housing News, Stephen Sobin highlighted that while inflation is still a challenge for the Federal Reserve, there are many positive signs for the commercial real estate industry. The headline Consumer Price Index rose 3.2 percent for the year ended Feb. 29, a figure 20 basis points lower than the Dec. 31, 2023, rate. read the full article.
Commercial Spotlight: Mid-Atlantic Region In this four-state powerhouse, smaller metros are thriving.
In a feature in Scotsman Guide, the Mid-Atlantic Region's real estate dynamics are explored, highlighting its resilience and growth amidst the pandemic.
Stephen Sobin of Select Commercial Funding LLC shared insights on the New York market's allure and the challenges buyers face. He noted the shift from primary urban areas to tertiary markets due to evolving preferences and financial conditions. For a deeper dive into Sobin's analysis, read the full article.
What the New Jobs Report Means for CRE
In an article titled "What the New Jobs Report Means for CRE" in Commercial Property Executive, Stephen Sobin shared his perspective on the latest jobs report and its implications for the Commercial Real Estate (CRE) sector. He highlighted the challenges posed by high interest rates and the prevailing uncertainty in the market. Sobin remarked, "Sellers aren’t selling, buyers aren’t buying... Everyone is waiting because no one knows what to expect." For a detailed analysis and more of Sobin's insights, read the full article.
Decoding "Junk Fees" in Rental Housing
In another latest contribution to Multi-Housing News, Sobin provided expert commentary in an article titled "What's Next for Junk Fees? The Industry Weighs In". He clarified the difference between legitimate fees collected for various third-party services and so-called "junk fees". Sobin emphasized the importance of borrowers understanding their rights in negotiating all loan terms and the obligation of lenders to disclose all fees.
Understanding the Impact of Federal Reserve's Decisions
In a recent article titled "How the Fed's Pause on Interest Rates Impacts Multifamily" published by Multi-Housing News, Sobin shared his expert insights on the Federal Reserve's decision to pause interest rate hikes. He accurately predicted that the Fed would not raise rates in June, citing recent bank failures and lingering concerns about a potential recession.
Stay tuned for more expert insights from Stephen A. Sobin on the evolving multifamily financing landscape.
Frequently Asked Questions
What’s going on with commercial mortgage rates as we near the end of 2024?
The Federal Reserve’s Federal Open Markets Committee cut the federal funds rate by 50 basis points at its September 18, 2024, meeting. This was the first rate cut since March 2020, when the Fed began a long series of rate hikes to curb the high rate of inflation. The Fed’s decision shows that they believe that inflation is under control and moving into the 2% range that the Fed has set as its goal. The Federal Reserve took this decisive action to prevent further declines in the labor market. The Fed has further hinted at further cuts at its two remaining meetings in 2024, followed by additional cuts in 2025. This rate cut, along with possible future rate cuts, may create positive investor demand for commercial real estate, and may provide aid for commercial mortgage customers, as well as consumers in general. We must caution, however, that the Federal Reserve cuts affect short term interest rates directly and long-term rates only indirectly. The Prime Rate, which is a short-term rate, dropped from 8.50% to 8.00% with the Fed’s recent action. However, most commercial mortgage rates are based on the 5-, 7-, or 10-year treasury rates, and not the Prime Rate. We have seen these treasury rates actually rise since the Fed took its action. On September 18th, the 10-year treasury was roughly 3.70%. Three weeks later, this rate had jumped to 4.03%. Investors are still concerned about future inflation and are adopting a wait and see attitude.
There are many different types of lenders offering a myriad of different loan products to finance the acquisition or refinance of apartment properties nationwide. These lenders include agency lenders (Fannie Mae and Freddie Mac), local and national banks, insurance companies, credit unions and private lenders.
Most lenders write apartment loans for five, seven or ten years (fixed) with a 30 year amortization. It is also possible to obtain loans that are fixed for up to 30 years, although this is not the norm. Rates are typically based on a margin over the corresponding US Treasury rate.
Lenders offer non-recourse to strong borrowers and solid properties. The borrower will be expected to have strong credit, good net worth and liquidity, and experience owning and managing similar properties. The property will be expected to demonstrate solid long term positive cash flow, be in good to excellent condition, and be located in a strong market with low vacancy rates.
Apartment loans are typically screened and pre-approved in 2-3 days. Since lenders require appraisals, environmental and property condition reports, and title, closings will usually take 45-60 days from application.
Apartment Loan Types We Serve
If you are looking to purchase or refinance a Reno apartment building, don't hesitate to contact us. We arrange financing in the city of Reno for the following:
- Large urban high-rise multifamily buildings
- Suburban garden multifamilycomplexes
- Small multifamily buildings containing 5+ units
- Underlying cooperative multifamily building loans
- Portfolios of small multifamily properties and/or single-family rental properties
- Other multi-family and mixed-use properties
Apartment Loan Helpful Articles
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Recent Multifamily Loan Closings
Whether you are purchasing or refinancing, we have the right solutions available for your multifamily mortgage loans. We will entertain apartment loan requests of all sizes, beginning at $1,500,000. Get started with a Free Commercial Mortgage Loan Quote.
Reno Apartment Loans
Select Commercial provides apartment loans throughout Reno, Nevada including, but not limited to, the areas below. We provide apartment loans in most major cities throughout the United States.