How Hungry Are Multifamily Investors?

LOS ANGELES—We may be looking at another several years in this cycle, according to John Sebree, VP and national director of the national multifamily housing group at Marcus & Millichap. Sebree is moderating the Industry Leaders: The Way Forward panel at the upcoming RealShare Apartments on October 22 in Downtown Los Angeles. Before he takes to the stage, we sat down with him to exclusively talk about his plans for the panel and where he sees the market.

“The big question that everyone has is how much appetite do you have to move forward. People who are not deep into the multifamily side of the business feel that we have had a seven-year run, and usually a seven year run is about all that we are going to get. That is kind of an uneducated perception,” Sebree tells GlobeSt.com. “The people who are following the metrics and who are understanding what is happening in the multifamily industry and digesting the demographic changes and job growth numbers, are understanding that it is likely that we could see this positive momentum in the industry continue for another three to five years.”

Some of the other questions he plans to pose to his panelists—Jeff Day, CEO of Berkeley Point Capital; James Flynn, CIO of Hunt Mortgage Group; Grace Huebscher, president of Capital One Multifamily Finance; Michael J. Schall, president and CEO of Essex Property Trust—include: Are your rent growth and NOI growth numbers accelerating as much in 2015 as they were in 2013? Where do you see opportunity? Is syndicated equity willing to accept a lower return than they would two years ago?

Sebree, of course, has his own market opinions from working with industry leaders daily and traveling across the country several times a week. “The basic fundamentals in the economy, the real estate industry and the multifamily industry appear to be very positive for the next three or four years,” he says. “If I have an opinion, I don't think that the thing to slow down the multifamily industry in this cycle is going to be from the multifamily industry. I am not predicting upheaval, and I do think that we are in a place to see growth for the next several years, but there is a lot of craziness in the world, and I think that could get people to pull back a little bit.”

He notes that while the returns aren't has big as they were a few years ago, because “everything has been picked over” and because “we don't have pent up demand,” we are still “moving forward at a strong rate.”

To hear more on this topic and hear the industry leaders weigh in, join us at RealShare Apartments on October 22 in Downtown Los Angeles.