As PeerStreet’s content marketing manager, I get the opportunity to work with lots of people across the organization. When I need to know something, I feel like I have a large swath of resources… subject matter experts from all walks of life... tech gurus, seasoned former brokers, even real estate investing virtuosos who have been working in the industry since before I learned to tie my shoes (full disclosure: velcro was clutch for me until at least the first grade).
So, when PeerStreet announced it was relaunching its Multifamily Loan Product, I knew I needed to track down one of these experts to tell me everything (okay not everything, but a lot) about the state of the multifamily market.
I had heard great things about Tom Hallock, PeerStreet’s Head of Loan Products, but hadn’t had the chance to connect with him until the multifamily relaunch surfaced. His resume is impressive to say the least — here’s his LI page so you can see for yourself — and if I’m being honest, I was a bit nervous about our call.
Needless to say, about 30 seconds into our conversation my fears subsided. Not only is Tom a seasoned vet in the multifamily loan space, he’s also a genuinely nice guy (and his son is the first American to win the Champions League in Water Polo AND is a two-time Olympian for the USA!).
Tom explained trends in the larger market, PeerStreet’s decision to relaunch its multifamily product, and he even shared some interesting ways to view multifamily unit ownership. Here are some excerpts from our conversation —
Primarily, it was driven by our internal market trends and the types of business that our partners do, and want to do.
We believe in a multifamily loan product offering, but in light of Covid, we wanted to make sure that we understood what the larger market was doing. And we wanted to see if the multifamily market was going to take a significant value hit.
Once it became apparent that the multifamily market was going to continue to be a strong product offering — and we saw that investor appetite for real estate investing had rebounded strongly from the earlier stages of Covid — we decided to relaunch our Multifamily Bridge Loan Product, hiring Multifamily General Manager Jon Spelke to manage and run the program.
It is somewhat different in the fact that we elected to bring out a bridge product first. We did this, in part, because there was a lot of demand from our retail investors.
We also took a hard look at the lessons we learned from our first iteration of multifamily offerings, deciding to focus on internal valuation, making sure that we really understood the business plan of the intended borrower for each multifamily loan PeerStreet decides to fund or purchase.
Multifamily is a really interesting market segment — one of the things we have to recognize is that there’s a severe housing shortage in our cities. So, even if cities like New York or San Francisco take a temporary hit, there’s still a big need for multifamily dwellings.
And with the new work-from-home revolution, we’re seeing borrowers reconfigure spaces, upgrading to meet new tech demands, and shifting space layout requirements.
The market will always morph and change, but I think those types of improvements — for example, carving out spaces for dwellers to use a little bit differently — make multifamily units attractive to renters and owners alike.
Picture a small apartment building with the opportunity to service seasonal workers — landing somewhere in the middle of short term and long term — this is a place for doctors, nurses, teachers. Or, seasonal workers who support restaurants and resorts. This type of dwelling becomes especially viable when we start thinking of today's environment where people can work from anywhere.
Want to see what life is like in a cute Colorado mountain town? Rent an apartment for a month and try it out...
The problem is the long-term finance market doesn’t like this type of arrangement. They want one-year leases, they want the security of long-term occupants. That’s where private lenders and alternative lending platforms like PeerStreet come into play. We give the market — originators and their borrowers — alternative and flexible options that are applicable to what’s happening right now.
At PeerStreet, we’re progressive, so we can adjust to what's happening around us.
And that’s how Tom wrapped up our conversation, summarizing why we do what we do at PeerStreet.
Our ultimate goal at PeerStreet is to help investors build wealth while helping property owners rebuild and rejuvenate homes and communities. By providing an accessible platform for originators to increase their loan volume, we can help real estate entrepreneurs reverse the decay of aging housing across the United States. PeerStreet’s Multifamily Bridge Loan Product was created to empower originators, borrowers, and investors to meet (and possibly exceed) their financial goals and needs.
Katie Knox is PeerStreet’s Content Marketing Manager. With over a decade of professional writing experience, she’s written everything from product descriptions and websites, to screenplays about killer robots. When she’s not creating all things content, she can be found picking up heavy things and putting them down again for fun.
