40% of multifamily properties bought in Q 3 and Q 4 2020 and 2021 with variable rate debt will likely not get refinanced by their current lenders. In these scenarios, operators will be forced to attempt to raise more money via capital calls from their current investors and/or take on rescue capital from 3rd parties. The last option is to give properties back to the bank. Over the past couple years, the high price of multifamily properties did not pencil without high leverage bridge debt, but as a result of the precipitous rate increases of the last year, operators are now paying the piper for taking the risk. Neal Bawa, Founder of GroCapitus, saw the writing on the wall and only acquired one property during this time, and sold several. As a result, he did incredibly well by his investors. Neal is currently waiting for the market to correct much further before he’ll even consider making another acquisition.