September 22, 2016
Multifamily remains a viable asset class, though not as hot as it once was. At Connect Apartments 2016’s “Multifamily Investment: A View from the Top” on Sept. 15, panelists representing owners and investors shared insights on the current scenario.
Though the sector is still robust, most agreed that it is entering the cycle’s late stages, meaning rent growth will slow, while the pipeline becomes less full. The attitude among the speakers, however, remained cautiously optimistic, as they shared strategies.
AECOM Capital, for example, is focusing on submarkets and micro markets for investments, while Greystar is emphasizing coastal market investments. “These are great for long-term sustainability, for valuation and long-term growth potential and liquidity, if something should cause us grief,” said Kevin Kaberna with Greystar. Meanwhile, “we are lower leveraged in the sector than we were a few years back,” acknowledged AECOM Capital’s Ted Fentin.
John Bezzant with AIMCO said the multifamily REIT’s current strategy is to invest in “a dozen markets around the country, as different markets, at different times, will be at different points in the cycle.” Though AIMCO does have some exposure to the high-growth markets, “we made the decision to diversify out of the high-barrier, core coastal markets,” Bezzant said.
Canyon Partners likes the top-20 gateway markets, with a focus on affordable housing renovated to provide a safe and comfortable experience for tenants, according to the company’s Charlie Rose. “Our equity side is focused on workforce housing in major markets,” he commented. “But there isn’t that much available in the sector.”
Rod Chu with UBS-Global noted his company has capitalized 12,000 units nationally during the past five years, but is cutting back on multifamily deals. “We’re still looking at some, but few, development deals,” he said. “We’re trying to insert ourselves in the capital stack, and adopting a defensive strategy.”
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