LOS ANGELES—“The market is picking up. It is the hottest I have seen it in seven or eight years with a lot of transaction volume…something that will continue.” That is according to Ed Rosen, managing director of investment sales at Berkadia.
Rosen, who served as a panelist on the brokerage panel at RealShare Apartments on Thursday, said that with the alternative yields out there and the yield compression, it seems like everything is really selling, not just value-add opportunities. “It is a difficult environment to get opportunities because there are so many buyers out there.”
For Susan Tjarksen, principal and managing broker for KIG, who operates throughout the Midwest and will do approximately $1-billion worth of transactions this year mostly in downtown Chicago, things are very healthy in her region. “Chicago is a very healthy market with job growth and stability,” she said. “We are seeing a lot of institutional money.”
Tjarksen explained that value-add, which she said is the darling, and has been for the last few years, has changed its definition immensely from where it started to where it is today. “Frankly, I am surprised there is still value-add available today.”
Dylan Simon, an associate at Colliers International, says that those who thought they could still enter Seattle at a discount should think again. “We are fully priced up there and are seeing an extreme amount of development in the region. There is a tremendous about of health in the market.”
Simon says that the presale market is very vibrant there and that part of the value-add story is on the presale. “The most competitive buyers want a seat at the table,” he said. “We are seeing the investors that have lots of capital to deploy, but the lenders are trying to stay disciplined.”
When asked about challenges, Simon explained that in a lot of what is trading in the urban market and in the urban infill, most of the issues are environmental. “What we are trying to do with our sellers is coach them through, and make sure all the boxes are checked. On the due diligence, we have to make sure we are underwriting everything correctly.”
Over 60 high-level speakers and nearly 2000 were in attendance at this year's RealShare Apartments event. The RealShare Conference Series is produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.
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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.
