They predict that this sector will continue to offer superior risk-adjusted, unleveraged annual returns in the low double digits over the next five years. Gold and Chen cite a variety of factors to support their case including: the equilibrium between apartment supply and demand in most markets, new construction remains within reasonable limits and changing lifestyle choices that are driving up the demand for rental space. Plus, an economic downturn would tend to have less of an impact on multifamily housing than on other property types.

They note that multifamily portfolios can be diversified among tax credit housing (offering below 10% returns), senior living development (14% to 16% returns) and mezzanine debt (18 % to 20% returns). Other opportunities include infill development, gut rehabs of class B and C acquisitions, urban center redevelopment, joint ventures with REITs and investments in undervalued REITs.

Lend Lease is a real estate investment manager and advisor to pension funs with $41 billion under management for institutional and private clients.