X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Stacey Corso, editor of Real Estate New York, is also co-editor of MULTI HOUSING forum.

MIAMI-”I’m bullish on the multifamily market,” Linwood Thompson, head of Marcus & Millichap’s National Multi Housing Group in Atlanta, told a crowd of nearly 200 people in attendance at the second annual RealShare Multifamily Investment & Finance Conference. The event took place Wednesday and Thursday at the Biltmore Hotel in Coral Gables.

From a macroeconomic perspective, Thompson said the national multifamily market is in for “a real growth spurt.” The prime drivers would be rising demand from growing states such as Florida, Texas and California, where an influx of immigrants by the year 2012 is expected to bolster demand significantly for both rental and for-sale housing. Thompson said that despite the recent recession, he doesn’t envision inflation rising substantially.

Furthermore, business investment in US industries “has come roaring back” in the past year, although employers haven’t made much of an effort to replace jobs lost during the downturn, he noted. Instead, US employers have kept job-growth rates under 2% because of a lack of faith in the economy’s resilience and increased productivity on the part of the American worker. And, despite, the many press reports blaming the slow economic recovery on outsourcing overseas, Thompson said that the productivity issue is really the cause for the country’s lagging job growth.

But Thompson wasn’t the only multifamily professional who was bullish on current multifamily conditions. During the event’s Town Hall meeting, the experts said demand from echo boomers, aging baby boomers and immigrants is fueling demand across many metropolitan areas, including those that are considered secondary and tertiary, such as the Southeast.

The whole Eastern Seaboard is dotted with multifamily hot spots, even though land prices, construction costs and homebuilding upticks may all have their impact, according to Scott Melnick, senior vice president for Transwestern Commercial Services. Despite those threats, “The Mid-Atlantic is still trending up, and national homebuilders are coming into the region,” he said, citing such firms as Toll Brothers and Pulte.

Bruce McLean, principal of the Milestone Group, is bullish on those secondary or even tertiary markets. “We like downtrodden markets. We like to turn properties around through our marketing and management efforts,” he said. Milestone, based in New York City, prefers to buy apartments in bulk, he noted.

Marc Goldstein, president of Creekstone Partners, a division of Houston-based Creekstone Cos., has an eye for emerging markets that “are on their way back,” he said, adding that cities with improving job-growth numbers are favored. Last year, Creekstone purchased one-off properties in Denver, Phoenix, Charlotte and other locations that industry experts consider “soft, but recovering markets.” He said that he is even bullish on the prospects for multifamily growth in Dallas, a city traditionally filled with homeowners.

Overall, the panelists agreed that the luxury multifamily-housing market has begun to lose its luster because of the cap rates and pricing, especially in markets such as New York City and Southern California. Therefore, the big players are focusing on class B product, with minimal replacement costs. Goldstein said that his firm’s acquisition strategy is to buy B properties built in the 1980s, add value to them and put them back on the market.

Finally, those in attendance at the Town Hall meeting were generally weary of the saturated Florida multifamily market, particularly in South Florida, Orlando and Tampa. Melnick said he is concerned about the supply of housing and the fevered demand for condos, wondering how long that demand can be sustained.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.