Q&A with Christina Ying, Partner at Herrick


The real estate attorney discusses the main challenges in financing multifamily properties and which new areas in New York are attracting foreign investors.

Christina Ying, Partner in Herrick’s Real Estate Department
Christina Ying, Partner in Herrick’s Real Estate Department

New York—The financing market for multifamily properties has tightened in the past years, but there are new solutions for developers or investors looking to capitalize on their real estate projects. Christina Ying, partner at Herrick’s Real Estate Department, talked to Multi-Housing News about how these changes have created new opportunities for alternative lenders and which types of properties are tempting for foreign investors looking into U.S. real estate.

MHN: Tell us about the challenges your clients face when it comes to financing their multifamily properties.

Christina Ying: The construction financing market for multifamily properties, both rental and condo, has tightened significantly in the past year. There are only few lenders making construction loans in the NYC market and they’re very selective about the projects they will finance. For example, some lenders will only finance projects that are close to public transportation or in a location where they feel comfortable that the local market can absorb the units once the project is complete.

MHN: Would you say that the banks’ loaning conditions are stricter now than they were a couple of years ago? How do you see this evolving in the coming years?

Ying: Lending requirements are stricter today than they were a few years ago. Loan to value requirements are lower and more equity is needed. Partial or full recourse is now being required and financial covenants for guarantors have also increased, with lenders requiring both a higher net worth and more liquidity.

MHN: Do you think alternative lending sources are becoming more and more popular? Why (not)?

Ying: Absolutely. Traditional lenders are becoming more conservative or they’re leaving the market. That’s created an opportunity for bridge lenders, who charge more interest to step in and provide construction financing for small to mid-size projects.

MHN: How would you describe the appetite of foreign investors for multifamily properties? Are we seeing more foreign capital than ever before? Do you think this will change? Why (not)?

Ying: There is still strong demand for multifamily properties from foreign investors. Barring any extraordinary events, I think we will continue to see foreign capital invested in U.S. multifamily for various reasons. For one, political unrest in certain parts of the world is causing investors to move their money to a more stable country like the United States. Also, real estate prices in many U.S. cities, including New York, are considered a good value when compared to international cities such as Hong Kong, London and Vancouver (where some believe there is a real estate bubble).

MHN: What is the number one challenge for a foreign real estate investor in the U.S. and how can it be fixed?

Ying: The number one challenge for a foreign investor is finding a product that fits their investment criteria. We get many requests from foreign investors looking for trophy properties in Manhattan, such as prime office buildings, five star hotels and condo development sites. Unfortunately, the supply of such properties is very limited, and there’s still an immense amount of capital chasing them when they do come on the market. I think many foreign investors are shifting their thinking, in part by looking to neighborhoods in Brooklyn and Queens. Many are looking there and finding compelling opportunities, particularly in multifamily.

MHN: From your experience, which would be the top three countries investing in U.S. real estate?

Ying: Israelis have been active in New York for a very long time, and that continues to be the case. We also have longstanding ties to Turkey, and an office in Istanbul, so we see a lot of activity from Turkish investors. Similarly, we have many active Chinese clients and continue to see strong demand there.

Image courtesy of Herrick

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