What up with MF Syndication these days?
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Stuart UdisPro Member
Attorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votesI would say the exact opposite. Not necessarily quality or substantive content but syndications now appear far more frequently in the daily conversations on the BiggerPockets forums than they did in the past. The posts are split almost evenly between aggrieved LPs, some with legitimate claims involving GP fraud or clearly bad actors, and LPs who are simply unsophisticated and unaware of what they actually invested in. Layered on top of that are complete novices, rarely with any experience and often without two nickels to rub together asking how to syndicate apartment transactions.
21 Replies
- 8moStuart UdisPro MemberAttorney · Philadelphia · Member since 2018 · 2k+ posts · 3k+ votes
I would say the exact opposite. Not necessarily quality or substantive content but syndications now appear far more frequently in the daily conversations on the BiggerPockets forums than they did in the past. The posts are split almost evenly between aggrieved LPs, some with legitimate claims involving GP fraud or clearly bad actors, and LPs who are simply unsophisticated and unaware of what they actually invested in. Layered on top of that are complete novices, rarely with any experience and often without two nickels to rub together asking how to syndicate apartment transactions.
- Real Estate Coach · Frisco, TX · Member since 2025 · 58 posts · 75 votes8mo
There has been a great deal of distress in the multifamily space over the past couple of years. Many people don't want to talk about it, but it is real. The transaction volume for new syndications has been way down. Much of the capital raising has been related to capital calls or new equity coming in to try to save deals.
With that said, there has been a big increase in discussions over the past month or two related to multifamily syndications and why some people feel 2026 is a good time to get engaged or re-engaged again.
- Apartment Syndicator · Charleston, SC · Member since 2017 · 519 posts · 631 votes8mo
@CJ Ball There has definitely been less discussion in this forum about syndications as of late. I believe that much of the discussion has shifted over to PassivePockets.
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes8mo
Quote from @CJ Ball:
I don’t see as much talk about the multi family syndication stuff anymore. Is it in a cooling period?
Yes. The MF market was hit pretty hard over the past several years and many of those that were in the BP Hall of Fame quickly were thrown into the Wall of Shame as they took extraordinary losses. Now many in the space had deals go sideways during that time -even the best operators, but there were many who targeted people on BP to invest in their offerings who had no business managing these assets and investors are now realizing they were in over there head but had great marketing.
7e investments53 Reviews- Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes7mo
Quote from @Chris Seveney:
Quote from @CJ Ball:
I don’t see as much talk about the multi family syndication stuff anymore. Is it in a cooling period?
Yes. The MF market was hit pretty hard over the past several years and many of those that were in the BP Hall of Fame quickly were thrown into the Wall of Shame as they took extraordinary losses. Now many in the space had deals go sideways during that time -even the best operators, but there were many who targeted people on BP to invest in their offerings who had no business managing these assets and investors are now realizing they were in over there head but had great marketing.
Gulp!
I hear ya. I personally invested in both Ashcroft and Praxis--two darlings of the BP crowd back in 2020 or so.
One I am a bit distressed about; the other I classify as "out to sea with no wind" but I think the ship and the captain are fine--it just needs more time and continued vigilant/wise asset management and it will work out fine ("single-digit-IRR-fine").
I definitely feel like I have taken some licks with those two choices, but sometimes in this biz the learning is worth the cost in lost dollars.
I will invest with one again for sure, the other I'm going to take my money and run--if they give it back to me!
I also have become more interested in debt and other CRE strategies lately.
And for my MF, I'm focused on "top-100" MF sponsors as far as size is concerned. My thinking is, if you have 500+ employees and are vertically integrated and have been around for 30 years, you're going to know what assets to invest in at this "bottom of the cycle" or "just about to reach bottom of the cycle" period we are in. One of them is marketing their seventh fund and it's a a 10-12 year hold time and an IRR more like 10% than 15%, but that's still what I call hitting a double...
BTW there is nothing wrong with REITs. Nuveen has a pretty compelling one and it pays like 4.5%-5.0%. That's what I call hitting a single--which does get you on base. - Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes7mo
Quote from @Jason Merchey:
Quote from @Chris Seveney:
Quote from @CJ Ball:
I don’t see as much talk about the multi family syndication stuff anymore. Is it in a cooling period?
Yes. The MF market was hit pretty hard over the past several years and many of those that were in the BP Hall of Fame quickly were thrown into the Wall of Shame as they took extraordinary losses. Now many in the space had deals go sideways during that time -even the best operators, but there were many who targeted people on BP to invest in their offerings who had no business managing these assets and investors are now realizing they were in over there head but had great marketing.
Gulp!
I hear ya. I personally invested in both Ashcroft and Praxis--two darlings of the BP crowd back in 2020 or so.
One I am a bit distressed about; the other I classify as "out to sea with no wind" but I think the ship and the captain are fine--it just needs more time and continued vigilant/wise asset management and it will work out fine ("single-digit-IRR-fine").
I definitely feel like I have taken some licks with those two choices, but sometimes in this biz the learning is worth the cost in lost dollars.
I will invest with one again for sure, the other I'm going to take my money and run--if they give it back to me!
I also have become more interested in debt and other CRE strategies lately.
And for my MF, I'm focused on "top-100" MF sponsors as far as size is concerned. My thinking is, if you have 500+ employees and are vertically integrated and have been around for 30 years, you're going to know what assets to invest in at this "bottom of the cycle" or "just about to reach bottom of the cycle" period we are in. One of them is marketing their seventh fund and it's a a 10-12 year hold time and an IRR more like 10% than 15%, but that's still what I call hitting a double...
BTW there is nothing wrong with REITs. Nuveen has a pretty compelling one and it pays like 4.5%-5.0%. That's what I call hitting a single--which does get you on base.A lot of it boils down to the operator, and are they an operator or a salesperson. there is a big difference and when you are in an economy that requires exceptional asset management you will learn quickly who performs what duty
7e investments53 Reviews
- FL · Member since 2013 · 41 posts · 34 votes8mo
"There is no asset class immune from too much capital"
Most of the syndicators focused on a small slice of the multifamily market, Class C multifamily in the sunbelt. The assets became grossly overpriced, economics normalized, financing became tougher, and many investors / general partners suffered losses.
There's some new MF Syndications happening now, but interest rates relative to cap rates at sale make it difficult to work on a spreadsheet. Access to equity capital has swung the other way, I'm in a number of investment groups with people who are just done with the asset class. Too many marketing packages that conflict with the PPMs leading to losses.
The worst were investors in "diversified funds" where the diversity was all focused in a single asset class and often the funds were used as a piggybank by the GP to bail out related party projects. The manager had discretion to do so in the PPM, but that's not how the funds were marketed. - 8moCJ BallInvestor · Virginia Beach, VA · Member since 2017 · 19 posts · 11 votesOP
Very interesting takes guys! I knew something was afoot with it.
So lastly... if not MF right now, where do you all see everyone shifting to? What's the trending topic now? Sorry we've been out of the loop for a little while.
- 8moBenjamin AakerPro MemberRental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes
Definitely less movement in the MF area right now due to a few factors. Sellers are still asking high dollars in a lot of areas and there are fewer buyers. Distressed syndicators aren't talking right now and LPs who haven't been seeing their expectations / promises from GPs met are. Poor planning and mismanagement has played a big role.
@CJ Ball to your question about where is it shifting to - If you are a multifamily guy, you should not move away so easily. Value is there right now with distressed properties. There are high-risk high-reward deals for those with assets to back up that risk. Ordinary deals can still be found. For those wanting to move, look at office - another depressed area which will rebound for those who can weather the storm.
- Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes8mo
@CJ Ball
If not MF, then what? For a bit, it was private credit and pref equity, but that seems to be cooling off a bit, as well; at least, relative to 2024.I think there are a lot of apartment LPs that are looking at other asset classes. I know of more than a few MF syndicators that have jumped into hotels. Car washes were hot for a minute. Many groups trying to raise money to buy "boring businesses". And of course, when the SP500 is gaining 15-30% per year, a lot of people are just pumping money into stock portfolios.
I, personally, returned to my roots of necessity-based retail for a multitude of reasons. A big one being that when I underwrite and bid on a retail asset, I am generally bidding against others that understand how investments works. The same can't be said with apartments, at any size.
- Boston, MA · Member since 2026 · 3 posts · 0 votes7mo
We run a small real estate investment company -- we invest in real estate development deals alongside a small group of investors (we don't do broad syndication). Over the past couple of years, deals have gotten meaningfully harder to pencil out — higher rates, higher construction costs, tighter spreads. We've been more selective as a result, offering fewer opportunities to our investors because we're not going to force a deal just to stay active.
That said, from what we've seen in the broader market, syndication activity hasn't cooled off at all. A lot of syndicators have stayed very aggressive — pushing into new markets and branching into sectors like industrial that weren't traditionally part of the apartment-syndication world. Whether that reflects real opportunity or just pressure to deploy capital and collect fees is something every LP should be thinking about.
- Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes7mo
I am aware that some sponsors are gun shy and sitting on dry powder--to mix metaphors--or moving into another space.
However I think analysts believe that a MF recovery has begun, but as Brian Burke said, the bottom of the market is not a moment, but a process. Thus, an investment made today might not look good for 1-2 years--returns-wise, occupancy-wise, rents-wise, etc.
However, if it is bought right (e.g., good loan, under replacement value, smart location) and if there is a value-add strategy involved, I think to act now would basically be like "buying low" so that one can "sell high" later.
There are also some tailwinds in MF now--despite the headwinds of a supply overhang in certain markets, and stress on the Class B and Class C demographics re: consumer confidence.
Basically the opposite of what I did in 2020 when I got involved with a couple of sponsors who are out to sea with no wind. One is simply waiting for the wind that will propel them toward a sale while prioritizing operations and maintenance/cap ex, and the other it might be better to say there is a little wind but it appears to be pushing them toward a huge f'ing sandbar.
Point being, if you have a 7-10 year investment horizon and are will accept a 10-12% IRR, then investing now could be advantageous, in part because it's not such a "risk on" time that a bunch of investor capital is crowding into the space--causing your Brad Sumroks and your Grant Cardones to get their hearts all a-flutter.... Basically, one has to have a little "faith" that the market is improving, and because it's not a time of "ABSOLUTELY, MF IS BACK, BABY!", some good deals can be gotten now.
Slow and steady wins this race. The crowd hasn't quite jumped on board with MF in droves yet. If you are comfortable hitting a double, and if your sponsor is quite conservative and competent, you could pick up an asset for a good cap rate and for under replacement value and ride it to a profit in five years.
- 7moDoug SmithPro MemberLender · Tampa, FL · Member since 2013 · 2k+ posts · 2k+ votes
From a lender's standpoint, it's been a concern for a while. Keep in mind, I'm in Florida...home of rising insurance rates. I was chatting with some of my old commercial banking buddies that have spread to different banks when we were at a business luncheon not too long ago and all of us said our respective institutions were being much less aggressive on "CRE", the commercial lending category where the debt service is covered by rents, not at operating entity...so MF, Office, Retail, etc. The concern is that the rate if increase in operating costs was grossly outpacing the increase in market rents. In other words, lenders are concerned that a property that cash flows positively today might not a couple of years down the road. I contend that Multi-Family is not as hot today because of that fact. We're certainly seeing a lot less than we did a couple of years ago. Really good post for discussion.
- Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes7mo
Yes I heard commentators at CBRE mention that cost-management is key to making asset acquisitions work. And asset management. AI is one of the big cost-reducers to some big, vertically-integrated sponsors.
Another strategy is to retain tenants since I believe 55% of tenants are not planning to move anytime soon.
In a time of rent softness and lack of pricing power, deals only work if you have other tools in the toolbox you can bring to bear on the numbers.
- Investor · Carmel, IN · Member since 2024 · 55 posts · 22 votes7mo
High interest rates and heavy supply in certain markets have definitely caused stress for a lot of GPs and LPs over the past few years. A lot of 2020–2022 deals were underwritten with aggressive rent growth and short-term floating rate debt, and when rates spiked, the math stopped working. That’s where we’ve seen capital calls and some real losses.
The operators who’ve held up best seem to be the ones who used conservative leverage, kept strong reserves, and didn’t rely on continued explosive growth in already hot markets.
If supply continues to get absorbed and capital markets normalize, I think deals structured carefully over the last couple of years could look pretty smart in hindsight.
- FL · Member since 2013 · 41 posts · 34 votes7mo
Adding to this thread....I think the math is still hard.
I saw a deal come across my email late last week I dug into because I knew the market and thought the 5yr agency rates looked decent compared to the in place cap rates.
I dig into the deal only to see buried in there that of the $13mil equity raise, $5mil was going to a preferred equity provider. Instead of a 60% percent debt in front of me, it was going to be a 60% first lien, 15% pref provider taking 13%, then 25% common equity.
The Year 1 economics to me as an LP were sub 4% in this scenario. If anything goes wrong with their business plan, my economics become 0% with a risk of capital loss. There's also some single project risk here with a good market but a significant amount of supply coming online.
That's just not appealing to me when Equity Residential is selling with daily liquidity, a 4% day 1 yield, and would see price apprication with overall improvements in the multifamily market.
I want to buy long term investments in solid properties for my LP investments, not a highly leveraged deal that's nothing more than an option on price appreication with a decent chance of capital loss. - Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes7mo
Good catch. I also caught the whole pref equity situation one time with a sponsor and it felt a bit uncomfortable to me as well.
- Investor · Indianapolis · Member since 2025 · 5 posts · 8 votes6mo
Sadly, many syndications focused on the boom of the sun belt got burned. Capital calls, longer hold periods, delayed closings, and lower returns hit alot of LP investors. This coupled with saturation, construction delays, high interest rates, and inflation has hit syndications and the market as a whole.
We have minimized this with incredibly conservative underwriting, a STRICT focus on the midwest, abundant cash reserves, longer hold periods, and maintaining 65 - 70% LTV. - Lender · Seattle, WA · Member since 2017 · 118 posts · 161 votes6mo
LP's and syndicators alike are not as gung-ho about investing in an illiquid 5.5%-7.00% yield quasi fixed income asset class in an environment where treasury bond yields are poised to rise structurally over the next 5-20 years. Yields up, cap rates up, market values down. Not a good asset class to bet on in a macro environment like this, especially with demographic / organic demand for housing generally declining globally.
- Investor · Hendersonville, NC · Member since 2013 · 754 posts · 281 votes6mo
Well if I am looking for yield in the 10% IRR plus range, I know that treasury bonds will not suffice. Which is why I believe in asset allocation that incorporates some of both general classes of assets (bonds and private real estate).
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