News Real Estate April 18, 2023

REBusinessOnline: Higher Interest Rates Cause Affordable Housing Values to Return to Old Norms

Rising interest rates dinging commercial real estate and multifamily assets have plunged low-income housing tax credit (LIHTC) properties back into reality, especially those coming to the end of their 15-year compliance periods.

“There were some huge profits made in the affordable housing space over the last two or three years. We sold a lot of properties for $60,000 a unit or even $120,000 a unit, and the debt was $40,000 a unit. But the mania over that type of profitability is over, and values are going back to where they were before.”
– Cliff McDaniel, Managing Director and Head of the Affordable Housing Real Estate Investment Sales Team