Each month of 2008 brought more doom and gloom to the nation's mounting economic crisis, and better news doesn't appear to be on the horizon.

The government announced its $700 billion rescue plan to buy troubled assets from financial institutions in October, followed a few weeks later by a $250 billion cash infusion for troubled financial institutions. But it's still going to take time for substantial changes to take place.

The amount of apartment transactions this year through Sept. 1 was down about 49 percent compared to the same period last year, according to Real Capital Analytics. And preliminary data on September's transactions paint a less-than-optimistic picture of what the fourth quarter might bring.

But it's not all bad news for the multifamily industry. Opportunities are still being found.

Apartment Finance Today's Top Deals of 2008 section features both large and creative transactions that occurred despite the credit crunch . Many closed in the first five months of the year before lenders grew more cautious, and many were coastal. But they all show innovation as well as a lot of hard work.

With uncertainty in the markets, UDR pre-arranged the financing before finding a buyer for its 25,684-unit portfolio. The strategy was a success, making it the largest deal of the year.

Niche markets are also looking somewhat recession-proof. American Campus Communities, Inc., paid $1.4 billion for its rival, GMH Communities Trust, earlier this year. And despite the economy, experts say that pricing of stabilized student housing properties in the best locations— usually within walking distance of a college campus—and strongest markets have held steady.

Another of the biggest deals of the year was for aff ordable housing. MacFarlane Costa Housing Partners and Avanath Aff ordable Capital purchased Simpson Housing Solutions' portfolio of 270 properties and 27,000 low-income housing tax credit apartments at the beginning of May. “It's a matter of working through the process to get the equity and financing that you need,” says Michael Costa, president and CEO of MacFarlane Costa Housing Partners.

What's on the industry's horizon? The financial and real estate markets will bottom out in 2009 and continue to fiounder in 2010, according Emerging Trends in Real Estate 2009, a report released in October by the Urban Land Institute and PricewaterhouseCoopers. But the report did show some brighter spots for the multifamily industry. It lists the apartment market as the No. 1 “buy” due to distress in the single-family market. Real estate experts believe moderateincome apartments in core urban areas near mass transit off er the best value. The apartment market also takes the report's top position among the property sectors most promising for investment.

However, Dan Fasulo, managing director of Real Capital Analytics, says construction financing is likely to dry up even more next year, which will mean a rough year for new development.

The January/February 2009 issue of Apartment Finance Today will shed more light on what's ahead in the new year for the capital markets and the multifamily industry.

Apartment Finance Today wants to hear how the credit crisis is aff ecting your business. Write a letter to the editor to share your experiences and lessons learned with other multifamily readers.