[Cshelton]

On properties like this, that is still possible, BUT..

It wouldn't happen with the same borrower on the same deal/loan. It would go into a whole new construction type of loan (which is usually some sort of short term "mezz" financing for the transition period), and then get underwritten on maybe a 10 year.

The issue with the above now though is the transition to multi family costs a lot. Many will try and get cities/states to subsidize it. And then getting a good loan to make the deal work in unknown. Nobody makes deals like that happen when there is this much uncertainty in the CRE market. If you can't secure financing post construction to make the cap rate work.. you're done. Deal is dead.