Jones: MBK Rental Living is focused on providing housing to residents throughout the state of California. We focus on areas that provide a compelling combination of population and/or employment growth, diverse demographics and supply constraints. Urban or suburban, our strategy aims to revitalize neighborhoods and build happiness by providing our residents with homes that fit their lifestyle and exceed their expectations. We do this by designing memorable gathering areas and amenities, offering thoughtful interior floor plans and finishes and extending gracious hospitality. Currently, we are building apartment projects in Riverside (Metro Gateway, 187 units), Murrieta (Mitchell Place, 230 units), Menifee (Menifee Town Center, 330 units) and Paso Robles (Blue Oak, 142 units), and we recently completed apartment communities in San Diego (Ocean Air, 100 units) and Corona (Palisades at Sierra Del Oro, 288 units).

GlobeSt.com: What were the biggest challenges in multifamily in 2016 and how is MBK addressing them? What's the outlook for 2017?

Jones: Apartment demand remains strong, but the market balance has been increasingly pressured by a rising tide of apartment construction. While construction has been relatively limited during this cycle through 2015, 2016 witnessed the return of the cranes in most CBDs. While still moderate at a national level compared to historic standards, the scale of new development within specific submarkets for completion of units in 2017 and 2018 is concerning and may lead to increased concessions. The other challenge of note is increased construction costs due to a shortage of skilled labor and code updates.

GlobeSt.com: What impact do you think the election results (on a federal and state level) will have on housing, specifically multifamily, in 2017?

Jones: While it is still too early to gauge the impact of yet-to-be-implemented policies, the election of Donald Trump and the Republican majority in the House and Senate may lead to increased federal spending on infrastructure and a relaxing of hyper-restrictive environmental regulations in 2017 and beyond. However, these policies may also lead to inflation and higher interest rates, which would limit for-sale housing growth and channel residents toward rental housing.

GlobeSt.com: Can you describe the general sentiment of the industry as we look toward 2017?

Jones: I would describe it as cautious and moderate in terms of underwriting assumptions, paired with the hope of continued demand for apartments that will keep the market in balance.

IRVINE, CA—Both the housing and apartment sectors have been experiencing a long and steady upward trajectory since the recession, but both still face challenges. We spoke with MBK Rental Living's VP of acquisitions and asset management Craig Jones about some of the biggest events and challenges in both sectors this year and his outlook for 2017.

GlobeSt.com: What were a few of the biggest events that shaped the housing industry in 2016? Was it what you expected?

Jones: The lack of “events” or real change helped sustain the long and steady upward housing-market trend for both for-sale housing and apartments. Interest rates remain low, the economy continues to grow and there are signs of personal income growth, which has been mostly absent during this expansion. Investment and development have been moderated by more conservative underwriting by lenders and equity sources, influenced by specific events such as Brexit and the national election.

GlobeSt.com: What can you tell us about your markets and product? Where are you looking for land, currently building, etc., and why?

Jones: MBK Rental Living is focused on providing housing to residents throughout the state of California. We focus on areas that provide a compelling combination of population and/or employment growth, diverse demographics and supply constraints. Urban or suburban, our strategy aims to revitalize neighborhoods and build happiness by providing our residents with homes that fit their lifestyle and exceed their expectations. We do this by designing memorable gathering areas and amenities, offering thoughtful interior floor plans and finishes and extending gracious hospitality. Currently, we are building apartment projects in Riverside (Metro Gateway, 187 units), Murrieta (Mitchell Place, 230 units), Menifee (Menifee Town Center, 330 units) and Paso Robles (Blue Oak, 142 units), and we recently completed apartment communities in San Diego (Ocean Air, 100 units) and Corona (Palisades at Sierra Del Oro, 288 units).

GlobeSt.com: What were the biggest challenges in multifamily in 2016 and how is MBK addressing them? What's the outlook for 2017?

Jones: Apartment demand remains strong, but the market balance has been increasingly pressured by a rising tide of apartment construction. While construction has been relatively limited during this cycle through 2015, 2016 witnessed the return of the cranes in most CBDs. While still moderate at a national level compared to historic standards, the scale of new development within specific submarkets for completion of units in 2017 and 2018 is concerning and may lead to increased concessions. The other challenge of note is increased construction costs due to a shortage of skilled labor and code updates.

GlobeSt.com: What impact do you think the election results (on a federal and state level) will have on housing, specifically multifamily, in 2017?

Jones: While it is still too early to gauge the impact of yet-to-be-implemented policies, the election of Donald Trump and the Republican majority in the House and Senate may lead to increased federal spending on infrastructure and a relaxing of hyper-restrictive environmental regulations in 2017 and beyond. However, these policies may also lead to inflation and higher interest rates, which would limit for-sale housing growth and channel residents toward rental housing.

GlobeSt.com: Can you describe the general sentiment of the industry as we look toward 2017?

Jones: I would describe it as cautious and moderate in terms of underwriting assumptions, paired with the hope of continued demand for apartments that will keep the market in balance.