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Our coverage of Bisnow's West Coast multifamily extravaganza, the BMAC West conference, continues (see Part 1) with a few panelists invoking the O word: concerns that some Class-A markets may be headed for an oversupply. (Which is only a welcome word when you're playing scrabble.)

Cypress Equity Investments CEO Michael Sorochinsky says all the sites the firm has bought in LA were either unentitled (in LA and unentitled, that's new) or entitled for something it would never build. (The company actually ended up downzoning many of them.) In today's world, opportunities to buy sites have become less prevalent and in LA, you're probably going to be building to a build-to-core strategy. This means a lower yield and an intent to own the property for a longer period.

Michael was on our industry giants panel, moderated by Allen Matkins partner William Devine. (We loved him in The Dark Knight Rises.) Another panelist, The Bascom Group managing partner Jerry Fink, says the momentum of Class-A buildings' rent growth has been declining for the past two years, except in the Bay Area and Silicon Valley. But the biggest single change in the business is the amenities—20 years ago, residents wouldn’t use 'em. Now, they're packing Internet rooms even though everyone has a computer. Instead of stadium seating, movie theaters boast bean bag chairs so residents can walk around and socialize while watching football. (Networking never ends.)

California Landmark prez Ken Kahan says that in some of his buildings, 50% of tenants never leave their units. They wake up, get two or three buddies that join them on their laptops, and do some sort of work on the 'Net. (This gives us the idea to put a slot in the front door for the pizza guy.) Ken wants to coin the phenomenon as a creative apartment building because it's similar to what the creative office guys are doing (except their tenants still have to leave at night). Ken says the firm's building product that allows them to stay in their units—edgy, creative office-looking, but they have bedrooms.

CBRE vice chairman Brian Eisendrath sees investors with higher yield requirements going to markets like Vegas, Phoenix, and the Inland Empire, where there's still an opportunity to buy at a discount to replacement cost. He's also seeing a lot of folks who did traditional JV equity deals now wanting to shift to a preferred position, especially on the development side where more supply is hitting the market. There’s a little bit of concern that when the product being built now sells in a few years, if the demand will be there and if the rents will hold up as more supply comes on-line.

Arent Fox partner M.J. Pritchett moderated an acquisitions roundtable, which included TruAmerica Multifamily acquisitions director Greg Campbell and Equity Residential SVP Barry Altshuler. Noting that people are being forced out of downtowns due to rising rents, Greg says if you bought properties on the outer rings, you'd get great returns now. (We've purchased some outer ring real estate on Saturn, it's a long-term commitment but the ROI should be amazing.) There's a lot of demand for that product because very little development is occurring in those submarkets.

Barry says Equity Residential's strategy is urban infill, and the company won't go outside of its core markets to buy. However, it may take a chance on a deal within its core markets, such as an odd location, if it can buy it right. That's because the company can afford to and can handle any downside that may happen.

Strategic Realty Capital CFO Andrew Murray says the company focuses on socially conscious investing and workforce housing with some 15,000 units. It's a double-bottom-line business: The company looks for well-located but tired properties—amenities haven't been updated and rents haven't been pushed—that makes them a livable environment through active management and well-spent capex dollars. Alliance residential COO Brad Cribbins calls Class-B properties an interesting play that presents sustainability from a pricing standpoint. In the future, though, he expects the company will be looking for Class-A properties given the oversupply in some markets that will likely end up being over their skis.