Wall Street Journal's $2 Trillion Real Estate Debt Warning | Nick Gerli

Multifamily refinancing and investment opportunities

Nick Gerli (Speaker 1): 00:00 The Wall Street Journal just ran an article a couple days ago about how there's a $2 trillion refinancing wall hitting for multifamily. And what they're talking about there is a lot of the apartment landlords over the last 10 years, back during the pandemic and late 2010s, they took out cheap debt, cheap interest-rate debt: 3%, 4%.

Most multifamily apartment loans are only five- to 10-year terms. So those are rolling now and over the next couple of years. And these apartment landlords are flipping from a 3.5% rate to a 6% rate, a 6.5% rate. And that's causing their interest burdens to double in some cases, meaning they're not going to cover their debt service in many cases.

It's a tough landscape right now if you're a real estate investor. I think the green shoot is this is the first time in 15-plus years where there's starting to be real opportunity, right? There's starting to be some real distress in these different sectors. And I think we're going to see even bigger discounts over the next year.