“The market will continue to grow, pending the tide of interest rates. Due to stronger financial safeguards in place from the federal government and lenders, interest rates may remain low for a longer period of time.” That is according to Janet Neman, senior managing director of Charles Dunn Co. in the Century City, CA office.
With this in mind, she says, as well as the compressed supply in developed metropolitan areas, “we can expect sale prices to keep rising for the foreseeable future.”
We chatted with Neman and other key industry sources on what is in store for multifamily's future as part of GlobeSt.com's 15th anniversary celebration.
Looking on a local level, in L.A. according to Pacific Palisades, CA-based Kimberly Stepp, principal at Stepp Commercial, “in the near future a new generation of owners will be entering the market, many of whom will not want to own and operate their parent's treasured asset.”
According to Stepp, “The new Light Rail and the infusion of capital from Silicon Beach, as well as a change in generational ownership will force Santa Monica's multifamily market to take a necessary step forward in encouraging new development.”
Malcolm Davies, principal at George Smith Partners, says that “while the future does look bright for multifamily, at some point we will build enough units, rent escalations will max out and the Millennials will start to settle down and have children.” When this happens, he adds, we will surely see things slow down as fundamentals come back into check. “Of course, that leads to the question of timing, and when all this will come to fruition?”
According to Adrienne Albert, CEO and founder of the Marketing Directors, based in New York City, “Small space rentals will proliferate because the rental values will continue to climb.” Condominiums, she says, will continue to be aimed at the super rich because land prices are too high to support any other kind of product. “As prices outstrip incomes, we must diligently watch for 'bubbles.' The only protection is the dearth of product. So little new product is created annually, so that it should save us from a future catastrophe.”
CBRE Capital Markets' J. Kevin Mulhern, SVP, predicts that we will see more village-style developments in multifamily's future. And he says we will see them in “more traditional suburban locations but with walkability to shipping and dining.” He also tells GlobeSt.com that there will be a continued emphasis on extensive community amenities to extend an active community lifestyle.
Gary Goodman, SVP of acquisitions at Passco Cos. LLC, tells GlobeSt.com that “Looking ahead, it's no secret that cities are evolving, and that the suburban sprawl is over. People want to live in more urban environments, where they are close to the action. As a result, we anticipate increased densification and a continued focus on the development of city cores which is highly supported by the planning departments of many of our major cities. A growing factor to watch over the next 15 years is transit oriented developments. As urbanization continues, properties situated in close proximity to transit will become king.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
