Plunging Oil Prices Create Development Difficulties

With oil prices slumping to about $30 a barrel, traditional financing has become increasingly difficult for Houston-area multifamily developers. ARA Newmark Principal Tim Dosch says institutional equity is all but gone, as banks are reluctant to lend, and other institutional investors have pulled back from new apartment deals.

But Dosch says some developers are coming into the market with private equity. Others have the backing of international investors. These investors are based in Latin America, Asia, Australia, Israel and Turkey, and Dosch says they consider Houston’s multifamily market a solid investment, despite the oil slump.