Multi-generational multifamily owners – who’s in and who’s out – by Shallini Mehra and Amit Doshi

May 13th 2025

Many long-time property owners are divesting from their rent stabilized properties at an increasingly rapid pace. This trend has gained momentum primarily due to the unyielding permanence of rent laws over the past six years and the increasing operating costs that continue to outstrip rent growth. In addition, the judiciary’s elongated timeline in processing evictions and tenant rent challenges, combined with the increasing compliance costs due to new local laws, further adds to the pressures landlords face. Sadly, for many owners, operating these assets profitably seems like a distant reality. In short, we are witnessing a multi-generational loss of wealth.

Unlike syndicators or short-term investors, these owners have a long-term vision for their properties and tenants. They take immense pride in making improvements to their buildings and providing a safe community and home for their tenants. However, they are now confronted within an untenable landscape.

According to the Mortgage Bankers Association, nationwide approximately 20% of the $4.8 trillion in multifamily and commercial mortgages will be maturing in 2025 of which 14% are multifamily. With diving appraisals stemming from higher interest rates and the passing of the HSTPA rent laws, the rent-stabilized values continue to fall below current levels of debt and property owners are facing significant equity losses. Many of these New York City multifamily loans are proceeding to workout stages with lenders. Owners have to make tough decisions about whether to complete cash-in refinances or give the keys back to the bank. It is a sobering scenario where some landlords are at odds with lenders unwilling to repossess properties. Lenders, whose core operations certainly do not include managing rent-stabilized assets, are now selling some of these mortgages below the unpaid principal balance or accepting discounted payoffs.

The market hinges not just on market metrics but on generational involvement and dedication to the real estate business and it remains to be seen who’s in and who’s out.

Shallini Mehra is a managing director and Amit Doshi is a senior executive managing director at Meridian Investment Sales, New York, N.Y.