|

HUNTINGTON BEACH, CA—Exposure to multifamily in CMBS is modest as compared to other types of real estate, but the real issue is, are lenders outside of the agencies getting too aggressive? said panelists at the IMN Multifamily Forum here on Thursday. Speakers on the panel, which was moderated by Todd Franks, managing director of SVN | Investment Sales Group, “Multifamily Fundamentals and the Cycle in a Shifting Trump Economic & Political Environment” tackled whether the expected stimulus and looser government regulation will affect the multifamily industry and how.

Panelist Robert Champion, founder and CEO of Champion Real Estate Co., said we have to look at the micro and macro impacts of these potential policies. “Yes, they will loosen regulations, but in this industry, regulations happen more at the state and local level, which are the opposite of what's happen at the federal level.” In the end, it nets itself out, he said.

Champion also explained that there are three different cycles to watch—the business cycle, the real estate cycle and the credit cycle—each with its own timeline. Business cycles can last six to 10 years, while real estate cycles, which are a matter of supply and demand, can last 18 years on average. “Once every 60 years, a business cycle corrects itself at the same time as the real estate cycle,” as we saw in 2008 with the Great Recession. We are currently in the seventh year of business-cycle expansion. Credit cycles last 60 years on average.