LOS ANGELES—It isn't that things are bad or that there is any real sort of pullback, they are just a little “less good.” That is according to panelists on the Industry Leaders panel at RealShare Aparments 2014.
“Rent growth is a little slower in some markets, but we still have robust demand and good fundamentals,” noted Jeff Day, CEO, Berkeley Point Capital LLC.
Al Brooks, president & head of commercial term lending at Chase, agreed, noting that while there might be some negative, he is very bullish and his company is growing its book. “If we could be double, we would do it tomorrow, but there just aren't the assets to do it.”
The biggest challenge today in the multifamily sector, according to Daryl Carter, chairman and CEO, Avanath Capital Management LLC, is the affordability and much of that affordability is lack of income growth. “Every pro forma you guys get, rent increases are 3% or 4% but people aren't getting 3% and 4% raises every year.”
When moderator John Sebree, VP and national director of NMHG at Marcus & Millichap, asked about how the affordable housing business will be progressing over the next few years, Carter pointed out that the medium income of renters is $35,000, and that half of his company's properties have waiting lists. “We don't have enough affordable rentals.”
When panelist Grace Huebscher, president of Capital One Multifamily Finance, discussed the regulatory pendulum, she said it is about as far as it can go. “If you are borrowing from a Capital One, or an Al Brooks, you are probably getting very competitive terms.” If anything, she added, “the pendulum has swung so much to the right, it is only going to get better from here.”
When asked about GSE reform, Huebscher noted that it isn't something the industry has to worry about for several years. “The earliest you might see an introduction to something will be post 2017.” But Carter thinks it will be a bit sooner, like 2015.
More than 1,500 attendees signed up for the two-day event, produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.
Be sure to check back with GlobeSt.com for more thoughts from this panel and others at RealShare Apartments.
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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.
