They predict that this sector will continue to offer superiorrisk-adjusted, unleveraged annual returns in the low double digitsover the next five years. Gold and Chen cite a variety of factorsto support their case including: the equilibrium between apartmentsupply and demand in most markets, new construction remains withinreasonable limits and changing lifestyle choices that are drivingup the demand for rental space. Plus, an economic downturn wouldtend to have less of an impact on multifamily housing than on otherproperty types.

They note that multifamily portfolios can be diversified amongtax credit housing (offering below 10% returns), senior livingdevelopment (14% to 16% returns) and mezzanine debt (18 % to 20%returns). Other opportunities include infill development, gutrehabs of class B and C acquisitions, urban center redevelopment,joint ventures with REITs and investments in undervalued REITs.

Lend Lease is a real estate investment manager and advisor topension funs with $41 billion under management for institutionaland private clients.