Investor interest in multifamily hasn't peaked yet, certainly not in SoCal, and Western National Group's George Ochs tells us why.
1. Home Ownership Rates Still Low
George says the percentage of home ownership nationwide dropped from the high 60s to the low 60s over the last 10 years, and there's no reason to expect a trend reversal. Of course, California is leading the way, with the current percentage of home ownership here in the low 50s. Recently Irvine-based Western National tapped George, a former institutional real estate manager with JP Morgan, to oversee the company's outreach to pension funds, endowments, foundations and high-net-worth individuals, to expand Western National's investor base in multifamily assets.
2. Those Millennials
The Millennial generation is unlike prior generations, George says. "They want the comforts of the home they were raised in but do not want to cut the grass," he adds. Millennials marry and start families later in life, making them more mobile and in pursuit of career opportunities. All that's a ringing endorsement for those aged under 35 to remain renters rather than homebuyers. With demographics that favorable, Western National anticipates investor demand for multifamily assets to remain strong, certainly for the next 12 to 24 months.
3. The Economics of Renting
George also says the price and availability of land in large California metros has reached a point where multifamily product is more affordable than single-family housing, in addition to being close to shopping, recreation and employment centers. Thus more residents are going to choose to be in rental properties, which will keep occupancies and rents up. Pictured: Barcelona, Palm Lane and Seville, three closely linked apartment properties that Western National owns in Anaheim.
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