The Pandemic 'Supercharged' the Southern Strategy in Multifamily
Joe Lubeck, CEO of American Landmark Apartments, says that Florida and Texas are the most highly sought-after apartment investment markets.
“The pandemic has super-charged the southern strategy,” according to Joe Lubeck, CEO of American Landmark Apartments. The company has always been bullish on the Sunbelt region, but since the pandemic, investors have flooded into the region, following population and job growth.
“The growth in the investor interest and customer interest in the Sunbelt has expanded beyond any body’s wildest expectations, and despite COVID or perhaps because of COVID, the market is very strong,” Lubeck tells GlobeSt.com. “We are seeing outsized job and population growth in the Sunbelt markets.”
Florida and Texas are the most highly sought-after markets in the region, although Lubeck says that all major markets in the Sunbelt are outperforming expectations. South Florida, Orlando, Jacksonville and Tampa in Florida and Dallas, San Antonio and Austin in Texas are the most active investment markets. “Austin in particular is booming because of tech companies and the Tesla relocation, although prices are also perhaps overheated,” says Lubeck.
While there is opportunity in Sunbelt, there is also intense competition. “The institutional sector has a large amount of pent-up capital to invest and they recognize the great risk-reward ratio of multifamily,” says Lubeck. “At the same time, retail, office and hospitality are not performing as well—hence, the push toward multifamily and industrial.”
Despite the competition, American Landmark is committed to quality underwriting. “It’s very important during a busy and heavily invested market that we continue to be selective and cautious, and not overpay on investments,” says Lubeck.
Outside of the Sunbelt region, demand is returning to some of the major metros. New York and Los Angeles are at the head of the pack for big city demand. “Chicago and San Francisco’s recovery is, in my opinion, less predictable,” adds Lubeck. However, American Landmark remains committed to the Sunbelt region. “Our focus remains wholly on the Sunbelt markets, where we see the least risk and fewer potential headwinds,” he says.