Navi Sandhu

Demand for multifamily new construction has not waned. Preferred equity and structured debt capital providers are hungry for new multifamily construction deals in markets throughout the country. Century West Partners and Fifield Cos. have projects in Los Angeles, Chicago, Miami and Minneapolis, and has seen strong interest for multifamily construction deals un both urban core and mid-rise product types.

“In terms of preferred equity and structured debt, we are still seeing a lot of appetite for that type of capital,” Navi Sandhu of Century West Partners and Fifield Cos., tells GlobeSt.com. “This is coming from debt funds and it is high-leverage capital going from 80% to 90% of the capital stack. It gets expensive, but these investors are willing to take a little bit more risk and not make equity returns. We do see a lot of interest from those types of providers across all of our projects.”

While preferred equity and structured debt are the most active in funding new construction multifamily projects, more traditional lenders are also still actively funding these deals. “In terms of traditional debt, that is also no an issue. Lenders haven't changes, we are still seeing 60% to 65% leverage,” says Sandhu. “If we want anything higher than that, we have to go to the debt funds.”