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Hours ago, over 450 of you jammed the Hyatt Regency for Bisnow's Baltimore Multifamily Summit. The latest from our all-star panelists: rents are up, vacancy is down, and we're blessed to be in Charm City. (As if you needed any reminding.)
Bill Roohan, CB Richard Ellis, CBRE, ARA Mid-Atlantic, Ryan Ogden, silent engines, education, healthcare, Fannie Mae, Freddie Mac, FHA, HUD, DC, Baltimore
We snapped CBRE vice chairman Bill Roohan with ARA Mid-Atlantic's Ryan Ogden. Bill says investors see Baltimore as a stable and accessible market, especially in light of ultra-low cap rates in DC (he says a Class-B deal trading at a 4.8% cap in the District would go for 5.25% here). 4,700 multifamily units have traded in greater Baltimore since December, driven by the ?silent engines? of education and healthcare. That doesn't mean overbuilding isn't a threat. He says there are 2,100 units under construction in the Baltimore metro, many of which are geared toward Gen-Yers. How are they getting financed? Institutions, banks, and HUD. Bill says 90% of the loans between April '09 and April '10 were provided by Fannie, Freddie, FHA, and HUD. Now other lenders like life companies are getting active and doing "50% to 60% of the business."
Toby Bozzuto, Bozzuto Development, supply, demand, debt, equity, institutional, loan to value, Class-A, downtown, apartments, commodity, innovate
Bozzuto Development prez Toby Bozzuto says the credit crunch of '08 created a supply imbalance. Combine that with Gen-Y coming of age (read: moving out of mom's basement) and you've got a recipe for increased demand that'll peak between '13 and '15. Which is why Toby says institutional debt and equity is as plentiful now as it was five years ago for good projects with good sponsors. Most lenders are doing deals at a 75% LTV, he says. Compare that to the situation in '09, when Toby says Class-A buildings downtown were battling each other for residents, using concessions as a weapon. ?That phenomenon could happen again,? he says. ?One way to protect yourself is to innovate. Apartments are a commodity, and renters respond to unique finishes.?
We tried getting everyone together for a group shot, but nobody would look.
Christine Espenshade, Jones Lang LaSalle, JLL, rents, revenue stream, Fannie Mae, Freddie Mac, transit-oriented, Generation Y, Baltimore City
JLL's Christine Espenshade says Baltimore-area rents are up by 3% over the past 12 months, but revenue streams have grown even more due to a burn off in concessions. Baltimore City's development pipeline is picking up, she says, and life companies are active again, offering LTVs lower than Fannie and Freddie's. Gen-Y is the key to understanding future demand, Christine says: ?67M Americans will be between the ages 20 and 34 by 2015. That demographic wants mobility over homeownership.? That makes them perfect renters for urban, transit-oriented properties.
Heidi Hansan, Miles & Stockbridge
Many thanks to our moderators, Miles & Stockbridge's Heidi Hansan . . .
Reznick Group, Gary Perlow
. . . and Reznick Group's Gary Perlow!