Rhee: Earlier this year, Kidder Mathews recruited a prominent and well-established multifamily team in San Diego, and we are looking to duplicate their success in the Orange County market. From senior management down to our supportive local and regional staff, everyone has been extremely welcoming, and we are very proud to be associated with such a professional organization servicing the needs of our clients.

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GlobeSt.com: How do you see the outlook for multifamily investment for the rest of the year?

Brombal: The year 2017 has trended in the same fashion as the previous several years, with historic apartment fundamentals, consistent rent growth and value appreciation. We do see this continuing throughout the rest of the year, but we are also beginning to see a tempering of this growth.

Rhee: There continues to be an abundance of cash in the market seeking apartment inventory, which has been scarce of late. In a recent assignment, we received eight offers, seven of which were all cash, and that activity resulted in a closing above the asking price in a 15-day escrow. Buyers continue to be bullish in pursuing prized apartment assets in desirable submarkets, evidenced by our recent closing of just over $10 million, which had a brief 10-day due diligence.

GlobeSt.com: Looking ahead to 2018, what are your predictions for multifamily investment and finance?

Brombal: On the finance side, we expect to see challenges in obtaining acceptable investor-loan proceeds due to the widening gap in current and market rents. It has been very challenging for private capital owners to keep pace with the rapid rental increases in Southern California. This has impacted the net operating income of buildings, and we frequently see loan-to-value ratios in the 50%-to-low-60% range. Rhee: With the amount of uncertainty in national and global affairs, we do not anticipate interest rates fluctuating dramatically. We are in an environment of historically compressed cap rates, which we do not see changing in the near future unless this wide gap between current and market rents dissipates. In 2018, should the expectations of buyers and sellers on pricing become less aligned, this could influence the historically low multifamily cap rates.

GlobeSt.com: What else should our readers know about the multifamily market as we move further into the second half of the year?

Brombal: We are seeing an unprecedented amount of new class-A multifamily development, along with smaller infill sites throughout Orange County. Older industrial, commercial and office property sites are being rezoned and redeveloped into infill-multifamily projects.

Rhee: This sheer number of units coming on line in the next 12 to 24 months could lead to class-A buildings continuing to offer concessions for absorption. Smaller class-B and class-C buildings throughout Orange County stand to benefit by providing an “affordable” housing alternative to the new class-A product.