As the debt market goes, so goes the real estate market. Banks play a pivotal role in driving transaction velocity and pricing power. However, many banks are slow to adjust their strategies to shifts in the rent-regulated market, either failing to recognize changes or lagging a full year behind in response. With COVID-era financing reaching maturity over the next 18 months, banks must take proactive steps to facilitate refinancing, workouts, note sales, deeds in lieu, or short sales. The Challenge with Rent-Stabilized Notes When a borrower defaults, a lender’s first…

Dear Governor Hochul, We share the same mutual interest in the success of the New York City housing industry. I’m one of many salespeople representing property owners of rent regulated apartment buildings. I’m writing this letter to you on behalf of an entire industry inclusive of landlords and lenders who are too afraid to publicly tell the truth in fear of reparations, vilification, or rent strikes. We love New York City. We work, play, live, and pay taxes to the greatest city in the world, and we are here to…

The Problem In the past five years the New York City multifamily market has experienced tremendous fluctuations. The passing of HSTPA in June of 2019 was the starting point of a transformative marketplace.  COVID ushered in new regulations and record low interest rates. This was quickly replaced with rapid rates hikes causing valuations to drop precipitously. Minimal rental increases for rent stabilized properties combined with upwards pressure on costs have created a distressed situation for both borrowers and lenders. Cash flow constraints, depressed valuations, and rates doubling when loans roll…