GlobeSt.com: Is there any risk of a valuation “bubble” or overbuilding occurring?

Lynd: Just like the period from 2003-2008, during which there was so much capital entering the market, the free flowing availability of debt allowed unqualified people to get apartment loans and drew in owners that shouldn’t have owned multifamily. I would say that, between development and acquisitions of multifamily growing, and the fact that fundamentals will be so strong during the next 3-5 years, I think the next bubble would be multifamily; that’s the one to watch.

Now, with overbuilding, developers are good at developing, no matter what. When you give them a headline like “largest single household formation ever,” that’s some fuel to really start putting some units on the ground. Clearly, lending will play a pat. If the lenders practice control and screen the projects and only work with projects that have merit, that will keep us from overbuilding tremendously. If equity and debt is there, though, the project will go up, whether there’s demand or not.

That would be a concern, but you’ve had a record low of deliveries, we’re at an all-time low of multifamily deliveries, so my opinion is it’ll take at least three to five years to catch up and backfill the normal demand we have. On top of that, though, you have additional renters entering the pool.

For us, as a company, we’re focusing on the luxury high-rise rental market. Most of the folks in major metros don’t want to buy homes or condos; they don’t want to put the 30% downpayment necessary into buying a home. So we believe those people who have the monthly income will opt to rent rather than own. Because of that, we’re looking to take advantage of what we think is a near-term opportunity and are planning to put high-rises in core markets.

GlobeSt.com: As long as we’re talking about lenders, are they more disposed to lend to multifamily projects?

Lynd: I think if you go in to get a loan for any sector, multifamily is the darling. It’s still difficult to get money for such projects -- lenders are still picky about projects they’ll take on. They’re asking a lot of tough questions these days. But if you’re an accomplished multifamily developer, you can go into most banks and they’ll be willing to talk with you.

Now, with equity, that’s shifting focus to development. There is a ton of equity looking for development and acquisition stuff, too. There will be a ton of debt coming due over the next couple of years, especially from CMBS, and the estimate is that only half of that will be refinanced.

GlobeSt.com: Where, geographically, are we seeing the greatest number of new units expected to come online?

Lynd: You’re seeing lots of building coming up in areas where there are jobs. Most of the Texas metros are experiencing good job growth, plus Texas, overall, did fairly well during the recession. Also, coastal cities. It’s harder to build in those areas because of higher barriers to entry, but we’ll likely see units go up in the larger population centers like New York, Miami, Southern California and even Chicago.

GlobeSt.com: I know construction costs are always an issue when it comes to development – what have been some of the trends there?

Lynd: Construction costs are a concern; it’s one of the bogeys you try to pin down when developing a project. Those costs will quickly become volatile. Imagine a market that hasn’t supplied a whole lot of anything for the past four years, and you get the idea. Once contractors understand they’re needed again, they’ll be inspired to make up for lost time. Estimates will go up.

GlobeSt.com: I’m asking you to brush off your crystal ball now – what can we look forward to seeing in the remainder of this coming year and even in to 2013?

Lynd: My opinion, for remainder of 2012, is that we’ll continue to see a low interest rate environment with rising rents and occupancy. We’ll see a lot more capital flow for acquisition and development. As banks continue to ramp up lending to multifamily developers, will see more developments, and that’ll continue into 2013. It’ll be interesting to see what interest rates will do after the election, and really what the policies will be for the economy and provisions for the country. Assuming we can get our politicians to solve some of the real problems in America and generate some positive news, I think the future for the multifamily sector is looking very good.