📢Portfolio-level refi by Douglas Emmett confirms lender appetite for scaled, coastal multifamily with clear operations and sponsor strength. Rate backdrop and credit windows are improving into the FOMC.
Refi size: > $1B across SoCal and Hawaii assets.
Mortgage rate: 6.49% 30-yr fixed, lowest since Oct 2024.
CMBS private-label issuance +23.9% YoY YTD (Jan–Aug 2025).
Loan Performance. Portfolio take-out signals stabilized DSCR with room for 50–75 bps stress. Recent MBA rate drift lowers pro forma debt service, improving coverage on fixed-rate options.
Demand Dynamics. Coastal Class A/B multifamily in LA/Honolulu remains occupancy-anchored; modest rent friction persists given affordability, so underwriting must not rely on outsized LTL capture near term.
Asset Strategies. Prioritize renewal capture and expense discipline ahead of lock. Insurance remains the swing line item; assume mid-single-digit NOI drag from premiums and taxes in coastal jurisdictions.
Capital Markets. Life-cos and banks price top sponsors first. CMBS window is reopening selectively with better prints and pending Fed action; portfolio execution captures scale benefits and diversified collateral.
Scale + coastal multifamily gets first-call pricing.
Use Q4 window to term out 2026 maturities.
Coverage first, proceeds second.
Keep stress buffer for +50 bps shocks.
🛠 Operator’s Lens
Pull renewals forward. Convert loss-to-lease before rate lock to lift DY and DSCR.
Bid insurance early and multi-market; model +8–12% YoY premium paths.
Track the curve reaction after FOMC. If front-end rallies hold, coupons compress modestly for A-quality sponsors. KBRA’s issuance uptick suggests incremental liquidity for clean multifamily; weaker sponsors remain spread-capped until macro clears.
Commercial Observer; KBRA; Reuters.
