ORLANDO—Despite recovering volumes, falling vacancies and increased rent growth, the multifamily sector continues to face risks, analysts said at the Mortgage Bankers Association's Commercial Real Estate Finance/Multifamily Housing Convention & Expo, held here this week.

“The markets—both debt and property—are very healthy, vibrant and in balance,” said Mark Beisler, managing director with Wells Fargo Multifamily Capital. “Both agencies and banks are navigating well. They're certainly anticipating more competition in 2014 over 2013, but they're prepared for it and entering the market with eyes wide open. They're going to compete on price over credit.”

Beisler said he has observed a “blurring of lines” between capital sources. “Life companies are more active in construction lending; banks are entering the permanent market and doing more seven- and 10-year business,” he said. “And multifamily is going to be a bigger component of the commercial mortgage-backed securities market going forward.”