Our first BMAC West (Bisnow Multifamily Annual Conference)featured nearly 30 movers and shakers representing virtually every aspect of the industry. Most day-long events in Beverly Hills require tanning beds or car chases, so we were proud to shake things up.
Ourindustry outlook featured R.W. Selby & Co CFO Jeff Mazzarella, Holland Partner Group chairman Clyde Holland, Essex Property Trust EVP of development John Eudy, The Fifield Cos chairman Steve Fifield, and RE3 (a UDR Company) managing director Don MacKenzie. With a market thats exclusively SoCal, Jeff says you can find great 1980s vintage-quality assets that are underutilizedhavent seen paint since they were builtreposition them, and move rents 20% or 30% inside of 24 months to 30 months. (We do the same thing when shopping for '80s vintage clothing. So if anyone wants some Doc Martens that are covered in paint...)
John says Essexs 36,000-unit portfolio is in the San Francisco Bay Area and Seattle, which he sees as at the bottom of the eighth inning for finding deals that make sense. Steve developed 8M SF of offices before going into residential. Operating in LA as Century West Partners, hes got 15 developments under way, five in construction. He would put the market in the seventh inning: Costs and land both are going up, and margins are getting narrower.
On our debt market panel, Opus Bank president-income property banking Dan Borland says the bank did $800M last year and expects that to increase to $1B in 2013, 30% of which will be in the companys new structured finance division. Latitude Management RE Investors president Glenn Sonnenberg says Latitude, a short-term bridge lender on value-add properties that does about $300M to $400M per year, looks at the long-term guys as the big catchers mitt at the end of our deals. (Did we forget to mention that the price of admission is one baseball metaphor?)
Freddie Mac managing regional director Paul Angle touched on the elephant in the room: the proposed 10% reduction in GSE multifamily lending. The good news is that the agency was planning a 10% cut anyway due to increased competition. In addition, Paul notescapacity has grown with additional staff and underwriters, reducing average processing times to two weeks from three.MetLife Real Estate Investments managing director John Menne says MetLife stays focused on replacement cost and barriers to entry when making a high-loan-per-unit loan.
Our construction and development panel featured MJW investments president Mark Weinstein, Mike Rovner Construction Orange County VP Sterling Lund, Tricorp Hearn Construction CEO Tony Moayed, Cohn Reznick national director-affordable housing industry Beth Mullen, and moderator Pankow regional VP Dave Eichten. According to Mark, MJW got involved in student housingseven years ago, with a big portfolio at University of Oregon and UC Santa Barbara; it's looking for those needles in the haystack right now in Seattle, Portland, and LA. Tony says Tricorp Hearn finished 1,000 units of multifamily last year.
Our future of multifamily panel featured John Burns Real Estate Consulting principal Mollie Carmichael, Intracorp regional president Peter Lauener, KTGY Group principal Manny Gonzalez, Harley Ellis Devereaux studio leader Daniel Gehman, SL Residential VP Greg Sadick, and Gallagher Real Estate & Hospitality managing director Alex Glickman. Mollie says Baby Boomers associate retirement with getting old and are moving out of their homes later. Theres a slight decline in Gen X because theyre moving into the single-family market, but Gen Y is very prevalent in the multifamily world. But make sure theres continuing demand--this group is starting to save money to buy homes.
Our equity outlook and state of fundraising panel featured The Praedium Group managing director Robert Murray, CityView president Sean Burton, The Bascom Group managing partner Jerry Fink, Waterton Associates president Marc Swerdlow, and CBRE vice chairman Brian Eisendrath. CityView has 43 projects to date--the vast majority in the West and Southwest. Most of our panelists say theyre holding assets much longer than anticipated.
On the 90th day of Christmas, my true love said to me, "You take Christmas way too seriously." Send your deals to Catie Dixon, catie@bisnow.com, or Tonie Auer, tonie@bisnow.com.