Multifamily Strategies for Challenging Times
The importance of broker relationships was stressed, particularly in light of the many off-market deals.
LOS ANGELES—The multifamily investment market presents various challenges, which were thoroughly addressed during the recent GlobeSt. Multifamily Fall Conference. Panelists, including Tess Gruenstein, SVP of acquisitions at Bailard Inc., shared their insights and actionable strategies for investors. Gruenstein stressed the significance of broker relationships, particularly given the rising number of off-market deals.
Christopher Finlay, the Chairman and CEO of Lloyd Jones LLC, concurred, underscoring the pivotal role that broker relationships play in bringing deals to the table. He highlighted how brokers’ knowledge of their investment criteria saves valuable time in the process.
Moderator Blake Harris, an attorney at Blake Harris Law, prompted a discussion about the future trajectory of the market. Finlay, drawing upon his experience with market cycles, acknowledged the challenging times but expressed confidence in the industry’s resilience. He emphasized the current focus on managing existing assets and nurturing debt and equity relationships, emphasizing the importance of transparent communication with partners.
Gruenstein chimed in, noting that the demand for multifamily housing remains strong in the coming years. She pointed out that in most markets, the rent-to-own equation isn’t viable due to high interest rates and a shortage of supply, a situation expected to worsen. She highlighted the need to navigate a period of disruption, exacerbated by factors like migration trends and insurance availability in places like Florida and Texas.
When delving into the impact of the debt market on the multifamily sector, Finlay described the current state as largely restricted. Debt availability has diminished, making it a challenging environment. He predicted this tight lending environment to persist for another year to 18 months.