Deals Morph as Multifamily Delivers
For the past two years, there were few, if any, merchant-build multifamily projects, but that’s going to change as assets are delivered this year, says JLL managing director Scott LaMontagne (here with his family). Transaction volume will increase and the deals will swing from the value-add and Class-B space (which has had best effective rent growth in Texas), he says. Investors were all playing in that vintage ‘80s and ‘90s rehab space, Scott tells us.
Through the rest of 2014 (and into ‘15 and ’16), as we see significant deliveries, the deals will shift back to core or Class-A, Scott says. The buyers who made their core-plus allocations now need to go buy for their long-term holds. He also thinks deal volume will rise as debts rollover (to the tune of about $5B of multifamily CMBS debt in Texas). CMBS rollover will be strongest through '17, he says. It will force properties to recapitalize or push into the transaction market. Here’s Scott speaking at a Bisnow multifamily event last year.
Coming from IPA to JLL this summer: executing joint assignments with former partners. One of those is a new Class-A project, Bulverde Oaks in San Antonio hitting the market next week. As he’s setting up the new JLL office (along with Moses Siller and Michael Gonzalez), Scott's been burning up about 3,000 miles a month between San Antonio and Austin. He’s looking to beef up the multifamily team, as well as the investment banking side with new partner Jake Kelly in Austin. When he’s not burning up I-35, he’s doing lots of jumping around with his daughters (ages 3 and 5).