Why Some Multifamily Syndications Are Struggling

A well-located property, a reputable sponsor, compelling projected returns – and yet across the multifamily sector, syndications have paused distributions, issued capital calls, and scrambled to refinance. The economics explain why.

The cause wasn't leverage alone: it was the kind of debt. Operators bought at peak prices on short-term, floating-rate bridge loans, underwriting for rent growth and low interest rates. They got the opposite: rates spiked, floating debt service doubled or tripled, taxes and insurance climbed 20–30% a year, and competing new supply reduced rents. Cash flow collapsed; capital calls followed. However, some deals with long-term fixed-rate debt with leverage, largely survived. Leverage was the villain in the case of most of the distressed multi-family properties.

And the damage was concentrated, not universal. Per CRED iQ, Multifamily distress from over leverage peaked near 12.9% in early 2025 (12-year high) while Industrial stayed under 1%. The pain sat almost entirely in multifamily deals built on floating-rate debt, not in multifamily as an asset class. As the Angel Investors Network stated in 2026, "the 2021–2022 multifamily syndication vintage is the worst retail real estate investor loss cycle since 2008."

That's the distinction that matters: the syndication itself was never the problem — the financing strategy was. In contrast, Brit Properties operates on a low-to-no-debt model — typically under 30% leverage, with several assets at zero debt. We sacrifice some upside for confident durability and unmatched staying power to survive, and thrive, in any part of the economic cycle instead of depending on everything going right.

“Once syndicators find out how we operate, they ask “are there other syndicators who have  your very low leverage model out there?  Answer:  Out of approximately 4,000 syndicators in the U.S, I can confidently say we are the only one structured around low-to-no debt”

Joel Friedland

Multifamily isn't a bad asset class. Historically it's one of the most resilient. What determines survival is debt structure, underwriting discipline, and time horizon. That's what we’ve been doing and we will continue with that strategy.