No Waning for Multifamily Demand
Multifamily demand still outnumbers the supply, fueled by unprecedented population increases combined with job growth and in-migration, says Marcus & Millichap regional manager Tim Speck (whom we snapped with colleagues Sarah Gonzalez, Jenny Russell, and Norman Eastwood Tuesday at the Marcus & Millichap/IPA Multifamily Forum DFW at the Tower Club in downtown Dallas). Tim says land is in great demand as more developers are hunting for workable multifamily sites. “We’re not creating near enough housing for the demand,” he says. And, greater density is needed on infill projects to get the ROI needed because of the higher land and construction costs. There’s more of these projects going on across the region, he says. It’s all a part of DFW’s natural maturation into a more cosmopolitan area and costs will drive density, Tim tells us.
There’s still a lot of transactions going on across all asset classes with deals expected to be the same or greater than last year, we heard at the forum. Two recent deals out of Marcus & Millichap’s Dallas office include the 208-unit The Quarters on Melody Lane in Dallas and the 86-unit Northridge Court in Cleburne. Marcus & Millichap's Nick Fluellen and Bard Hoover repped the buyers and sellers in both deals, Tim tells us.
We also found Deverick & Associates managing director Deverick Jordan and IPA capital markets director Brian Adams. Deverick is appraising a deal IPA is selling and financing for a mid '80s-era value-add deal, Brian tells us. He’s seeing a year-end push to get deals done and says the GSEs are getting aggressive with rates and interest only (they have a lot of competition from the banks and CMBS because everyone wants in on the action). He says some of the cap rates are getting pushed on value-add deals, however there’s lots of available bridge lenders offering non-recourse, low floating-rate financing up to 85% LTC funding the acquisition and rehab.