Sule Aygoren Carranza is managing editor of Real Estate Forum and editor of Multi Housing forum, from which this article is excerpted.
Seminole, FL—In an effort to leverage the coverage of its network and capitalize on investors' interest in multifamily product, Princeton, NJ-based NAI Global formed a specialty practice group focused solely on the apartment sector. NAI Global Multifamily Group will help owners, investors, developers and REITs with the acquisition and disposition of properties and portfolios and provide market research and valuation services. The group will also help owners and managers maximize the value of existing properties and reposition underperforming ones.
A year in the making, the NAI multifamily group brings together the capabilities of all the network's branches into one house, says John Burpee, principal of NAI's Tampa Bay office and national chair of the multifamily group. "We've got 5,000 associates in more than 350 offices in 45 countries and we feel that the multifamily business is very fragmented. By forming one centralized group focused on the sector, we can basically have a one-stop shop for the entire multifamily housing industry globally."
The group will improve NAI's existing capabilities by creating a more cohesive and far-reaching framework. For instance, it will have its own separate marketing package. Brokers located in the firm's global offices will have to meet a set of minimum standards before being considered for the multifamily group. Although the details are still being finalized, Burpee says brokers will likely need at least three to five years of multifamily experience and a minimum production level to join the team.
"They're going to have to be 100% focused on multifamily brokerage across the board," he says. "At that point, we feel that we can put together a network of brokers that has a tremendous amount more experience than the average broker coming into the market." The group currently has about 30 members.
The effort is also meant to help grow NAI's presence in the apartment industry. The network racks up in excess of $40 billion in transaction volume annually with more than $10 billion of that total in investment sales. Different NAI offices had varying levels of multifamily activity, and Burpee feels the formation of the group will help the company tap into more than $1 billion worth of potential deals in the marketplace.
"My branch alone does an average of $300 million to $500 million a year worth of multifamily business in the state of Florida, while some of the branches in California do that much in one or two offices," he says. "So when you combine the power of those numbers, all of a sudden it becomes a lot of business, particularly big business, if we can get those numbers harnessed."
With more capital looking for a home in apartments than there is available product and deal volumes rising in major metros, the executive believes it will be all the more easier for NAI brokers in distant markets to connect buyers and sellers. "When we do our monthly conference call, everybody is searching for deals," he says. "There are more buyers than we know what to do with right now, and finding the deal is the harder part of the transaction."
The group will serve players on local and regional levels, as well as larger investors such as REITs, institutions, private equity investors, hedge funds and foreign buyers. The average deal size is about 100-plus units, but Burpee notes that the team has been in talks with several REITs that are looking for large portfolios of 1,000 to 2,000 units across the US. It has also met with a few hedge funds seeking acquisitions of approximately $100 million, and another hedge fund in England looking for a $200-million-plus transaction. The goal, he says, "is to offer broad exposure to clients both large and small. The global network will allow the multifamily group to maximize the marketing exposure for clients."
The chairman has lofty goals for the team. Not only would he like to see individual brokers be one of the top-three go-to professionals in their given markets, he'd also like to grow the group as a whole to make NAI one of the top three multifamily brokers across the country over the next three to five years.
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