Women of Influence Panelists Describe Today's Deal Flow

PARK CITY, UT—The disruption of 2020 is still being felt across the industry, for better or worse depending on the sector. Meaning the market environment for, say, office is world’s away from what is happening in the logistics industry. To understand what is driving transaction activity, panelists at the GlobeSt. ELITE Women of Influence conference gathered here in Park City, UT to dissect the current landscape, which has been characterized by high liquidity and steady property values.

 Most investors are really reshaping their investment strategy to be the winning bid, noted Kristen Croxton, SVP of originations at Capital One Multifamily Finance. She explained that many of her clients are seeking new markets and trying to chase yield. “Places like Reno, Tucson, Colorado Springs and Albuquerque are now on the radar as investors continue to spread out.”

At Guggenheim Investments, the ecommerce boom has driven a lot of recent activity and that is a trend that will continue to magnify, according to the firm. Jennifer Marler, head of real estate at the firm, noted that the surge in e-commerce activity and focus on the supply chain has driven many new investments for the firm over the last 12 months but has also put many strains on the supply chain. 

Marler continued that her firm is partnering with experts to co-invest in industrial product with a focus on warehouse and distribution space and are targeting spaces with long-term leases and strong credit tenants to mitigate risk. But she added that the main challenge right now is the “truffle hunt for yield.” 

For Anna-Marie Lieb, head of multi-housing at CrowdStreet, her firm has seen strong rent growth throughout the pandemic. “Multifamily has remained strong. I don’t think the markets are overheated.”

Julie Baird, president of First American Exchange Co., talked about seeing a real shift to residential properties as well as the geographic shift that Croxton has mentioned. “There has been a shift to outside of the urban core into suburban and into vacation destinations.”

Baird also said in terms of 1031 exchanges, she is actually seeing more reverse exchange transactions. “We are keeping a close eye on the proposed cap on the amount of gain that can be deferred. We are keeping our eyes on capital gains tax rate. We are also watching how carried interest rates are treated. All of those can really impact investor behavior.” She added that “interest rates have really been a driver of activity and there will also be a drive to sell and buy and get done in 2021 with some of the proposed changes.”

Switching gears a bit, panelists talked about working from home in the past year and the challenges associated with it.  Marler said that the shift to work-from-home has made it difficult for teams to collaborate and it seems to be affecting the younger workers more. “COVID taught us that we can work from home, but we have also learned that a fully remote workforce may not work for everyone and creates challenges for corporate culture and high-performing teams.”