MIAMI—Will debt markets shift? How will South Florida's multifamily investor mix evolve this year? What about surprises? GlobeSt.com caught up with Hampton Beebe, executive managing director of ARA Newmark, to get some insights in part one of this exclusive interview.
GlobeSt.com: What market or debt market shifts investors should watch for in 2018?
Beebe: We expect similar, if not slightly higher, sales volume in South Florida in 2018. The employment outlook and figures on population growth continue to be very strong which will help stabilize all the new supply currently in lease-up. We expect value-add strategies in apartment properties to show strong returns for investors and thus continue to be very competitive.
Agencies will continue to be the predominant lending source in multifamily, but they are now seeing increased competition from life insurance companies for class A assets. We are also seeing several large institutions raise equity for debt funds which will compete for business.
GlobeSt.com: What will surprise people this year and why?
Beebe: The potential positive impact that tax reform could have on Florida population growth. If residents in states like New York and New Jersey can no longer write off their state and local taxes, it could persuade additional migration to Florida. Also, the number of empty nesters and Baby Boomers that continue to move into high end urban apartment communities will come as a surprise when we see how high the average incomes are in these new communities.
GlobeSt.com: How the region's investor mix will evolve in 2018?
Beebe: We'll see more and more international capital from Canada, Asia and the Middle East flowing into multifamily—especially as we continue exposing US assignments to the most active capital sources around the world. We also expect to facilitate more direct investment from these regions in 2018. Additionally, almost every major domestic advisor now has access to a variety of international capital sources in their funds and advising as separate accounts.”
(Check out these six multifamily trends to watch in 2018 You can still read part one of this interview: Did the 2017 South Florida Multifamily Market Live Up to the 2016 Hype?).
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