Multifamily deals offered with pre-existing loans and attractive interest rates will be most favored in the coming months as the inflationary environment heats up – and stabilized properties will be in even greater demand as they can provide higher returns and more certainty, according to one industry veteran.
Otto Ozen, Executive Vice President of The Mogharebi Group, says the asset class will continue to be an attractive inflation hedge: it's historically outperformed other asset classes from a yield perspective, and as the costs of homeownership continue to be staggeringly out of reach for many would-be buyers, demand drivers remain strong.
"As mortgage rates rise, the affordability gap widens, increasing the barriers of entry for home buyers and subsequently pushing them towards renting," he says. "This shift will provide a strong rental market allowing rental rate growth to outpace inflation."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.