A weekend topic starting with Multi-Housing News. "Thanks to the lengthy economic expansion, record-low interest rates and solid fundamentals, multifamily has gained wider acceptance on the debt side, and a host of newcomers have flooded the space. Despite a lack of track records in some cases, these non-bank lenders have stepped in to fill the gap left by banks, which have tightened their credit standards in line with stricter regulation."

"In this milieu, multifamily bridge lenders have seen a surge in demand for their non-recourse, short-term loan products—an ideal fit for borrowers looking to execute unique investment plans faster, using financing with more innovative structures and less stringent terms. While agency lenders still capture the majority of multifamily debt, bridge loan originators have proven adept at providing quick and flexible solutions throughout the capital stack."

"Bridge lenders don’t require the cash flow and occupancy thresholds that permanent lenders do. Additionally, the non-recourse component of a typical bridge loan makes it easier for the borrower to carry the unstabilized asset through the capital improvement process."

"As the cycle wears on and competition for well-qualified borrowers intensifies, underwriting standards will become even more important for bridge lenders to ensure credit quality and facilitate favorable exit strategies. Jonathan Daniel, principal of Greenwich, Conn.-based Knighthead Funding cautioned: 'Over the next 12 to 18 months, if interest rates go up by 50 basis points and concessions continue to rise—(compressing) cash flows—then that’s not a very good outcome for getting refinanced out of a bridge loan.'"

From Globe St.. "Investors are chasing rent growth in secondary or emerging markets, but where affordability issues haven’t become a burden on residents. Richard Boynton, SVP of acquisitions at Fairfield Residential, said that secondary markets are typically more cyclical, using Dallas as an example. The market has seen substantial growth and has nearly 40,000 apartment units under construction."

"'The question is if we go into a recession, what is going to happen to their 40,000 units,' he asked. 'I wouldn’t want to be in that market.'"

The Dallas Morning News in Texas. "The newest apartment tower on the way in Dallas' Victory Park project won't open until 2021. That's probably a good thing."

"The Dallas area has seen a flood of new high-rise, high-priced rental projects in the last few years and more are on the way. Developer Hines' 39-story Victor tower in Victory Park will be one of the biggest. The builders are betting that with a 32-month construction schedule, most of their competitors will be out of the market by the time The Victor opens."

"Dallas leads the country in apartment building with almost 35,000 units in the construction pipeline. So far, the local market has gobbled up almost everything developers can throw at it. 'We are well aware of the supply Dallas has built unlike anywhere else in the country other than New York,' said Hines' Corbin Eckel. 'Luxury residential has seen a large influx of new units at the same price point.'"

"With so many more new super-luxury, super-price apartments on the way, don't be surprised if there are more bargains offered for renters. A month of free rent is already common in the market."

From West Seattle Blog in Washington. "3600 CALIFORNIA SW: Listed as 'California Court Apartments and Redevelopment Site,' the 90-year-old 9-unit brick complex at 3600 California SW is on the market for just under $3 million. The marketing flyer (PDF) elaborates: 'The current owner has intentionally kept 7 rent-ready units vacant upon turnover to allow the future purchaser the opportunity to quickly boost Net Operating Income with new tenants on market rate leases. 2 units remain occupied by tenants on a month-to-month basis at rates well below comparable units in the neighborhood.'"

From The Real Deal on New York. "Thanks to a glut of inventory, don’t expect to see big shifts in Manhattan’s rental market anytime soon. The size of concession was 3 months of free rent or equivalent, up from 1.2. Coming out of peak season, rampant concessions are here to stay, said Hal Gavzie, executive manager of leasing at Douglas Elliman. 'I don’t see that changing any time soon,' he said. 'The entire market is still fueled by the amount of inventory.'"

From The Coloradoan. "Fort Collins' tight rental market appears to be easing, but more supply isn't bringing prices down. June's 4.1 percent vacancy rate in Fort Collins is the highest it's been in five years. Lisa Winchester, president of the Northern Colorado Apartment Association and manager of The Crowne at Timberline, said there has been a slowdown in the number of potential tenants touring her units. 'We just don't have as many people walking through the doors.'"

"Despite the increase in units, rents haven't dropped and likely won't drop, said Ron Throupe, a professor at the University of Denver who researches and co-authors the survey with Von Stroh. 'New units tend to come in at higher than average rents because most new units are Class A,' he wrote. 'Thus rent averages tend to go up with new unit completion.'"

"Rent decreases come when inventory is overbuilt. Fort Collins isn't there yet. 'Pricing adjustments, if they even happen, tend to be less than 5 percent' over two years, he said."

From McKnights Senior Living. "I am all-too-well aware of the fact that nobody likes a party pooper. Yet it’s time to point out a possible scenario few among us will want to acknowledge: A senior living bubble may be about to burst."

"A reckless, fearmongering prediction on my part? Perhaps, but I don’t think so. And before you get back to the dance floor, please consider the following three observations."

"Observation One: There is an awful lot of low-cost, low-hurdle capital for the taking right now. Rare is the operator who cannot find funding for remodeling, renovations, a new wing or something a bit more ambitious. That’s not a bad thing per se. But history has shown that too much of a good thing is rarely a good thing in senior living."

"It was not long ago that the National Investment Center for Seniors Housing & Care Fall Conference limited participation to 1,500 attendees. This year, there were more than 3,100. Happy-to-be-here newbies accounted for much of the increase. Many of these exuberant deal-seekers have yet to experience the ugly side of senior living investing. Believe me, it’s not pleasant for anyone involved. Except maybe bankruptcy attorneys."

"Observation Two: There are not a whole lot of good deals to be had right now. When lenders compete, you win. That’s a phrase Lending Tree is making famous. But what happens when an operator obtains money that never should have been forked over? Well, it was about 11 years ago that we saw that scenario play out in the housing market. As for how that story ended, anyone remember the Great Recession?"

"Observation Three: A lot of players seem to be hedging their bets. Take a look at our update from yesterday: Brookdale continues to trim its portfolio, National Health Investors has restructured its Holiday lease agreements and LTC Properties is trying to figure out why occupancy is down. Not exactly warm and fuzzy developments, are they? Again folks, those are stories from a single day."

"Each of these observations is a bit troubling on its own merits. Collectively, they make a strong case for trouble on the horizon. Hardly want to sound like I’m crying wolf here. But don’t say you weren’t warned."