By Fred Matera, CIO, Redwood Trust A lack of affordability will lead to near-term weakness,…
CoreVest recently headed to Biscayne Bay, Florida to attend IMN’s first Middle-Market Multifamily Forum in the sunshine state. Featuring discussion panels from prominent leaders in the industry, including CoreVest’s Managing Director, Boris Zhuravel, the program was a great opportunity for both small and mid-sized owners and operators to take a deep dive into the issues, opportunities, strategies, and trends impacting the multifamily real estate investing space.
Adam Luray, Brandon Turk, and Joakim Mortensen also attended the forum on behalf of team CoreVest and shared what they learned from conversations with peers, panelists and clients in the 7 takeaways below:
1. Current cap rates, increasing interest rates, and high construction costs are of significant concern for many investors who attended the conference.
2. New investment opportunities have been difficult to come by recently. At today’s cap rate, the incentive to sell is much higher than it is to buy. This means that creative solutions are more important now than ever. (See #3)
3. Many opportunities exist in less obvious multifamily housing types, such as hotel-to-multifamily conversions, short-term rentals, and master- or corporate-leased transactions. Thinking outside of the box with these creative transaction types has proved to be quite successful for many investors.
4. In states within the Sun Belt, which includes the southwest and southeast, demand for fully entitled land with garden-style multifamily development has risen significantly.
5. The concern of rising interest rates have led investors to scale back their original renovations and construction plans. It has also incentivized them to finish current projects quicker (while interest rates are more favorable), leading to a tighter timeline for many investors.
6. Rent growth has led many owners to exceed projections for their properties. However, the low likelihood of this trend continuing at such a high trajectory was a concern that many attendees shared.
7. Although this conference focused on multifamily developments, the single-family rental sector remained a frequent topic of discussion among attendees. The industry is also seeing a rapid rise in the demand for Build for Rent (BFR) and SFR properties, and investors are realizing the enormous benefits of both property types.
We would like to thank IMN for inviting Boris Zhuravel to speak at its annual Middle-Market Multifamily Forum. We would also like to thank Joakim, Boris, Adam, and Brandon for sharing their insight from the conference. The CoreVest team greatly enjoyed our conversations with investors and industry experts. We look forward to meeting more real estate investors at our upcoming events!