DENVER and SAN DIEGO: Multifamily Peaks and Pits
Two recent Bisnow events yielded two very different multifamily outlooks, worth noting for anyone looking to invest out West. There's no doubt booming Denver is a strong market for owners and developers, according to panelists (including BMC Investments' Matt Joblon and East West Partners' Amy Carra, above) at Bisnow's second annual Denver Multifamily Summit. Here are some stats they brought up: this year, effective rents will grow at least 10%. About 49,000 jobs will be added this year, and for every 3.5 jobs added, one apartment unit's going to be absorbed. With 45,000 units planned or under construction for a five- or six-year pipeline, all we have to say is holy development, Batman!
Less enthusiastic panelists at Bisnow's San Diego Multifamily Summit (including MG Properties Group prez Mark Gleiberman, MVE & Partners principal Ken Nilmeier, and OliverMcMillan senior managing director Dan Nishikawa, above) said that California's a tough place to develop in the sector. (It's easier to get on a reality show at this point.) The challenges of getting new product out of the ground are many. The regulatory environment is infamously complex here and developers need to spend a lot of time with community groups to generate goodwill, they say. And that's just the beginning: Labor's getting shorter and some materials more expensive. The upside? It's constraining supply.