To hear from top dogs in multifamily from across the country, 550 gathered at the Westin Galleria yesterday morning for Bisnow'ssecond annual Multifamily Summit. They were enlightened (and entertained.)
|The pre-game schmoozing filled the lobby with networking as far as the eye could see. Despite the heat outside (it was 91 when we started at 7am), there were unconfirmed (and exaggerated) reports of 48 coffee pot refills.|
Panel moderator (and very thirsty man) Mark Edgren, VP for DFW regional land/site development at Huitt-Zollars, had the challenge of making sure the first panel, which focused on national multifamily, played nice. AMLI Residential Partners chairman/CEO Greg Mutz did jokingly refer to Behringer Harvard Multifamily REIT I COO Mark Alfieri as ?Comrade Mark? for Mark?s opinion that GSE lending is a good thing (though, he admits, he just closed a deal that benefited from it).
Gables Residential prez/CEO David Fitch says the Atlanta-based firm is throwing caution to the wind and pursuing product that isn't a typical fit with Gables' strategy. They're selling products that have peaked their economic lives, building new projects, and trying to take advantage of what are still below-par construction costs. ?We are completely shifted from a defensive operating mode to an offensive operating mode,? he says. Gables is pushing rents in all markets and is aggressive on the operating and development fronts.
Greg says ?11 is going to be a good year (a very good year for blue-blooded multifamilies of independent means), next year will likely be OK, and '13 and beyond will have a tsunami of supply delivered. ?And demand will ebb…it can't continue to be like this. It's too good,? he warns. Amli has 13 deals in the pipeline developing at significant values, he says, but the investors purchasing are buying simply because they've got the capital and they've got to put it out. As a result, they're driving the pricing up, he says, comparing it to a game of musical chairs.
Mark says in '09 and '10, the REIT was acquiring properties left and right and then the bottom dropped out and he saw the most amazing turnaround in valuations (not in a good way) as values dropped 40% overnight. They?ve come back during the past 18 months, and in many cases they're north of peak valuation in some markets. ?I?d like to say we're pumping the brakes, but we're competitive on the acquisition front,? he says. ?We're focused on development. We have to grow the business.? The REIT's doing some mezz—closing one and several others are working, he says.
Mark says Behringer Harvard is doing some development in-house, too. The REIT has bought a couple of sites, with one starting construction in September. He anticipates beginning eight to 10 deals in the next year or so. ?It's challenging to get money out today and it's hard to justify the cap rates in the market,? he says. He thinks the demand will wane for multifamily over the next 12 to 24 months as cap rates are pushed back up and other asset classes come into vogue. Greg?s recommendation to the crowd (with a wink and a nod) is to invest in anything other than multifamily. We think he may have some ocean-front property in Arizona he'd recommend, too.
Stopping by to chat with sponsor Balfour Beatty Construction, we found Texas Commercial Mortgage?s Sam Taylor (in the back) with Humphreys & Partners' Mark Humphreys, Balfour Beatty?s Corky Vaughn, Gensler?s Marsha Getto-Aikens, Balfour Beatty?s Mike Flanigan, and STB Architects & Planners? Jerry Stewart. Mike tells us Balfour Beatty?s expanding nationally to address the market as it rebounds by offering national access to local projects and national support to help with clients? efforts. (It takes a village to complete infrastructure construction.) He's seeing pockets of rebounds happening in the mid-Atlantic and coastal Carolinas, in particular. The firm's got deals in North Florida and Houston working right now and they're getting calls for more. The firm's multifamily team had its best year ever in 2010 with 2009 as the second best year.
Up and at 'em bright and early were The Tower Club?s Diane Dobis and Laurie Harris. As event sponsors, Diane says the private club is offering Bisnow readers a half-price initiation fee to become a member (make sure you tell her Bisnow sent you). The club recently renovated its interiors, she tells us. And, in addition to offering panoramic views of the Metroplex from the sky-level club in the CBD, members have access to enhanced travel, golf, and recreational opportunities.
We snapped another event sponsor, Partner Engineering and Science?s Jeff Polasek and Summer Gell, mingling in the crowds. Summer tells us the firm (with offices in Dallas and Houston) is the No. 1 P hase I ESA provider in the country by volume, according to EDR Scorekeeper. The firm also recently purchased Continental Survey and is now a nationwide survey coordinator providing American Land Title Association surveys across the country. Summer says the firm's partners (yes, she meant the play on words) are the experts in environmental and engineering due diligence for multifamily properties specializing in the unique requirements of Fannie Mae, Freddie Mac, and HUD/FHA.
Hanging around the Centerpoint sponsor table, we found Leo A Daly?s Tom Philippi, Turner Construction's Steve Whitcraft, Centerpoint?s David Gunderson, B2B CFO?s Tom Davis, and Centerpoint?s Randy McKittirck and Bobby Durham. Bobby (who had his eye on the crowd and more networking) tells us Centerpoint is about to break ground on The Vue, which is a 100k SF student housing project with underground parking near TCU. The firm has both design and development skills and can help arrange financing, too, he says. For an investor without the tools, Centerpoint?s staff can do all those things and doesn't charge development fees.
We snapped the crowded booth of sponsor Cantrell McCulloch with CMI's Kelli Oslan, Mark Cantrell, Thomas Cooke, and Tim Cantrell chatting with IRR?s Mark Lamb and Fidelity National Title?s Phil Shea. Mark Cantrell tells us his appraisers are hard at work right smack in the middle of the tax protest season. He says the market?s a little unusual these days (tell us about it!) as he's seeing both a lot of foreclosure and low-priced sales happening for the Class-C properties and strong economics for the Class-A product. That's causing appraisal districts to have fits on ascertaining accurate values. Of course, that leads to the need for a good tax agent, he tells us. On a personal note, he has one daughter graduating from Baylor this summer and the other starting her sophomore year at BU in the fall. With that said, he needs more tax work to pay that private tuition.
Always reaching out to CRE folks, at the sponsor table for The Real Estate Council, we found Dallas Regional Chamber's Jon Gilloon, TREC?s Tessa Samarripas, Allsteel?s Melanie Wick, and the Real Estate Tax Consulting Group's Ami Singh having a colorful conversation about the melting pot of DFW CRE. Tessa tells us TREC has set the date for the next Giving Gala, which will be on Oct. 6 at the Hilton Anatole in the Sculpture Park; it again features headline acts, a live auction of the pint-size playhouses designed and built by members, and an opportunity to network in a fun, casual setting. We're partial to the photo booth, good music, and open bar.
We stopped Rainmaker?s Ash Bell and Larry Bellack as they made their way into the event space. The duo traveled from Raleigh , NC, and Boca Raton, respectively, for the event when they heard who was on the panel, Ash tells us. Welcome to the 101 degree temps, guys. We hope you brought your swim trunks and sunscreen.