SAN FRANCISCO—“We have gotten a lot of volume outside of the City of San Francisco because that is where the opportunities lie from the standpoint of multifamily sales volume… There is lots of capital chasing product.” That is according to Alexa Mizrahi, loan originator of Lone Oak Fund.
Mizrahi recently spoke with the RealShare Bay Area conference, a the RealShare Conference Series event, which is produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.
According to Mizrahi, there has also been a resurgence of construction financing in the area, but she stressed that rising construction costs as well as rising interest rates were a concern. “But for development in coastal markets, San Francisco, Los Angeles and up and down the coast, we feel confident with the development that is going on. We don't foresee an issue.”
On the multifamily value-add side, according to Jeff Burns, SVP of Walker & Dunlop, there is a lot of product in the Bay Area that could benefit from renovation. “We have a lot of older multifamily stock,” he explained to the nearly 200 attendees.
Like Mizrahi, Burns noted that “The people that are active in that space are starting to get a bit nervous now about where interest rates are going to be. I think people that have more than a 24-month horizon on a value-add play are trying to figure out how to hedge their risk. Now, the question is can the rent growth continue at the pace it's been and if interest rates rise, you can really find yourself in a jam if you have taken out floating rate debt.” Some borrowers, he said, are willing to take less leverage going in. “It is an interesting time if you look at that space.”
For the urban core, Kris Lynds, SVP and regional director at Intervest, said that rents will continue to grow. “It is a landlord market in the inner core.” Outside of that, he said, there is a lot of rental homes and shadow inventory that can help with rent.
“It is a great time to own multifamily and great to be out in the market borrowing against multifamily,” Burns added.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
