McRoberts: There has been a significant decline in commercial-bank appetite for construction lending due to where we are in the cycle as well as pressure from their regulators. Terms have gotten a lot less favorable for borrowers. There is some hope for developers since some debt funds are being created to provide that debt now that it looks more attractive from a lender standpoint.

GlobeSt.com: Where do lenders feel most confident lending in the multifamily arena?

McRoberts: Due to the significant amount of deliveries of class-A product in many markets and the resulting downward pressure on rents, class-B properties in suburban locations are offering lenders lower risk today. We have a bridge-lending program that has taken off during the last year, and we are very comfortable with the risks there. Many 1990s and 2000s vintage properties have lagged market rent growth during the last several years and are ripe for renovation and will command much higher rents post rehab.

GlobeSt.com: What should our readers know about your expectations for the MBA CREF conference?

McRoberts: MBA CREF is always an educational experience about the prior year's commercial-mortgage activities, and more importantly, how the various debt sources see the year ahead. I expect to hear that most of the active sources of debt capital are anticipating another good year in 2017. I also expect to see new sources entering the market, particularly in the mezzanine and preferred-equity space. I also expect to hear a lot about the new administration and the impacts of potential policy changes on the real estate industry.

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.

SAN DIEGO—Among other issues, multifamily mortgage lenders are concerned about the amount of new deliveries in many markets that are driving decelerating rent growth, Mike McRoberts, COO of Prudential Mortgage Capital Co.'s Agency Lending Group, tells GlobeSt.com. McRoberts will be attending MBA's CREF/Multifamily Housing Convention & Expo here later this month. We spoke with him about the areas of concern for multifamily mortgage lenders at this point in the cycle and where they feel most confident, in addition to his expectations for the conference.

GlobeSt.com: What areas of concern are there for multifamily mortgage lenders at this point in the cycle?

McRoberts: Lenders are concerned about the amount of new deliveries in many markets that are driving decelerating rent growth. With a large pipeline of more new product hitting the market over the next two years, rent growth could flatline and possibly go negative in some markets. Additionally, lenders are concerned about the prospect of rising interest rates and the impact that could have on their loans at maturity. Rents will need to grow at a faster pace than the impact of rising interest rates in order for lenders to feel good about their exits.

GlobeSt.com: What is the current view on multifamily construction lending?

McRoberts: There has been a significant decline in commercial-bank appetite for construction lending due to where we are in the cycle as well as pressure from their regulators. Terms have gotten a lot less favorable for borrowers. There is some hope for developers since some debt funds are being created to provide that debt now that it looks more attractive from a lender standpoint.

GlobeSt.com: Where do lenders feel most confident lending in the multifamily arena?

McRoberts: Due to the significant amount of deliveries of class-A product in many markets and the resulting downward pressure on rents, class-B properties in suburban locations are offering lenders lower risk today. We have a bridge-lending program that has taken off during the last year, and we are very comfortable with the risks there. Many 1990s and 2000s vintage properties have lagged market rent growth during the last several years and are ripe for renovation and will command much higher rents post rehab.

GlobeSt.com: What should our readers know about your expectations for the MBA CREF conference?

McRoberts: MBA CREF is always an educational experience about the prior year's commercial-mortgage activities, and more importantly, how the various debt sources see the year ahead. I expect to hear that most of the active sources of debt capital are anticipating another good year in 2017. I also expect to see new sources entering the market, particularly in the mezzanine and preferred-equity space. I also expect to hear a lot about the new administration and the impacts of potential policy changes on the real estate industry.

Several economic factors have resulted in net positives for the multifamily sector and prices in core markets are at an all-time high. But just how long can the market continue on this trajectory? Join us at RealShare Apartments East on Feb. 28 and March 1 for insights on succeeding in the right markets as well as navigating and finding opportunities in the more challenging ones. Learn more.