Trevor Koskovich

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PHOENIX—The multifamily asset class may be white hot right now,but there are still attractive investment options in the sector,according to Trevor Koskovich, president of NorthMarq's Multifamilydivision.

"There are excellent opportunities happening out there in themarketplace," he tells GlobeSt.com. "There are especiallyattractive deals in the new construction space especially in highquality assets with a long term hold. The market is still starvedfor yields."

New Construction

New construction spaces are currently appealing because theyhave good basis points and investors can purchase new products forclose to the cost of an older product. "For example, I can buy anew building for $35,000 more than the cost of an old building. Ofcourse I would naturally gravitate towards the new construction,"says Koskovich.

Affordable Housing

Koskovich observes that the affordable housing space isattractive and there are a lot of investors taking advantage ofthat niche market. The problem is that regulations are so stiffthat building affordable housing can get stifling. "As a matter offact, the difference between the cost of constructing affordablehousing versus the cost of putting up a luxury high-rise buildingisn't that much," he says.

Value-add Properties

As for value-adds, "there is a lot of capital chasing thoseproperties," says Koskovich. "As a result, it can get pricey quick.It's a competitive environment."

An investment strategy which includes moderately lightrenovations to these older properties may offer significantpotential upside. Once renovated, these properties often providerenters with a valuable, reasonably-priced alternative to newconstruction.

Outlook

Koskovich sees the strong multifamily investment trend continueinto the rest of 2019, but with a more modest growth compared tolast year.