Just when you think you knew it all, new trends pop up. Experts at Bisnow's annual San Antonio Multifamily Summit Wednesday morning shared four ideas you should consider giving up for Lent. (It's not too late, right?)
1) One Bedroom Is Everything
Lynd Co CEO Mike Lynd says hes seeing stronger demand for two- and three-bedroom units than most people believe. (People want the Friendsroommate experience rather than the Seinfeldsingle.) Fundamentals are good for that product, but he says the capital markets dont like financing it because it runs against the trend.
2) Equity is Pulling Back
Many of our panelists mentioned a pull-back from equity in the last six months. (USAA managing director of multifamily developmentHailey Ghalib , middle front, felt it was a healthy move.) But Mike says that started reversing over the last few weeks. He says some players just got new allocations and still think multifamily is the best investment decision.
3) Your Idea of Workforce Housing
NRP Group SVP Dan Markson says development of workforce housing has largely been based on an outdated (if not completely incorrect) idea of blue collar workers as beer-drinking men in trailer parks. (Real men can appreciate ballet, ya know.) He says workers regardless of income want to hit the gym and take their girlfriends to a nice dinner now and then and this higher-quality lower-income product is underserved.
4) We Can't Handle aGSE Cutback
Berkadia SVP Brant Smith, whos on the Freddie Mac Advisory Council, says a 10% reduction in activity from the agencies isnt as scary as it sounds. (We were actually writing a horror movie script about it.) Before 2007, they accounted for 25% of multifamily deals. In 2010, that skyrocketed to 85% of the market. It has since dropped back to 40%, but Freddie and Fannie can drop 10% and still be above previous allocations. (In Texas last year they did 42% more business than their previous peak.) And the mandate has a caveat; if a major event causes illiquidity, the reduction will be negated.