Epstein: Part of the explanation is that rental units have been priced to move. But we've also seen robust hiring in the education, health services and leisure/hospitality sectors, which has helped compensate for the jobs we lost in the energy sector.

GlobeSt.com: How is this resonating with investors and lenders?

Tucker Knight: The general tenor among the lending community is that Houston is on the rebound. Fannie Mae and Freddie Mac remain extremely active, and while life companies are cautious, they are exponentially more active than there were in the latter part of 2016. Rates have plummeted 30 basis points in the past month, so that dramatically impacts cash flows on acquisitions and opens the door for refinancings on several deals that were borderline. It makes a lot of deals work.

GlobeSt.com: Are you seeing more activity this year?

Knight: Yes, quite a bit more activity. There has been an influx of new investors due to the fact they can purchase quality assets in a major MSA at normalized cap rates on temporarily depressed rents. We have also experienced the return of other groups or institutions that were not as active in the last cycle but feel it is the time to re-enter the market. Equity seems plentiful in the multifamily sector, but these groups are certainly cognizant of the fact that rental rates won't move or climb at the pace we have seen in the past few years.

HOUSTON—Multifamily demand in the Houston metropolitan area surged in 2017, according to a report just released by Berkadia. Ryan Epstein and Tucker Knight, senior managing directors of Berkadia's Houston office, recently discussed the first quarter Houston multifamily report and its implications in this exclusive.

GlobeSt.com: The Houston market absorbed 4,916 apartments in the first three months of 2017– that's more leasing activity than all of 2016. Is the Houston apartment market on the rebound?

Ryan Epstein: We are definitely absorbing more apartment units than we thought we would, and that's a good indicator that we're heading toward a more balanced market. While we are seeing more demand, the occupancy rate actually decreased this quarter (88.3%) due to the surplus of product on the market. But if this level of absorption continues, it's quite possible we'll turn a corner and landlords will regain some pricing power in the end of 2017.

GlobeSt.com: How do you explain the increased demand?

Epstein: Part of the explanation is that rental units have been priced to move. But we've also seen robust hiring in the education, health services and leisure/hospitality sectors, which has helped compensate for the jobs we lost in the energy sector.

GlobeSt.com: How is this resonating with investors and lenders?

Tucker Knight: The general tenor among the lending community is that Houston is on the rebound. Fannie Mae and Freddie Mac remain extremely active, and while life companies are cautious, they are exponentially more active than there were in the latter part of 2016. Rates have plummeted 30 basis points in the past month, so that dramatically impacts cash flows on acquisitions and opens the door for refinancings on several deals that were borderline. It makes a lot of deals work.

GlobeSt.com: Are you seeing more activity this year?

Knight: Yes, quite a bit more activity. There has been an influx of new investors due to the fact they can purchase quality assets in a major MSA at normalized cap rates on temporarily depressed rents. We have also experienced the return of other groups or institutions that were not as active in the last cycle but feel it is the time to re-enter the market. Equity seems plentiful in the multifamily sector, but these groups are certainly cognizant of the fact that rental rates won't move or climb at the pace we have seen in the past few years.