Multifamily Execs Share Insights and Strategies
Panelists were asked for their perspectives on market activity over the past year.
Today’s multifamily owners are navigating unprecedented challenges, yet they remain agile, profitable, and prepared to respond to rapid market shifts. At the GlobeSt. Multifamily Fall conference on Tuesday, attendees gained insights into the daily successes and hurdles faced by leading owners, exploring the factors driving profits and sustainable growth across various property classes.
Moderator Kamran Paydar, first vice president at CBRE Inc., led a panel featuring industry experts: Eric Ostgarden, vice president of property operations at AvalonBay Communities; Hailey Ghalib, senior managing director and head of housing investment and development at Affinius Capital; Damian Gancman, chief operating officer and chief financial officer at Cityview; Dean Zander, vice chairman at Newmark; and Noah Hochman, co-chief investment officer & head of capital markets at TruAmerica Multifamily.
Paydar opened the discussion by addressing the anticipated series of rate cuts at the beginning of the year, asking panelists for their perspectives on market activity over the past year.
Hochman noted a recent uptick in activity but acknowledged ongoing challenges. “It has been much slower than anticipated, with interest rates and borrowing costs being the main culprits,” he said.
Ghalib shared a similar sentiment, expressing that while their company has remained busy this year, the expected recovery did not materialize. “I’m a glass-half-full person, though,” she stated. “The supply and demand gap has narrowed significantly. While there is still uncertainty regarding the pace and depth of rate cuts, I believe the worst may be behind us.”
Ostgarden explained that his company closed five deals last month, emphasizing AvalonBay’s focus on strategic growth markets. “There’s a lot of activity happening—though it’s a bit dry in California, things are still moving.”
In terms of shifting market expectations, Zander said “It has been a robust year for us, but we’re now at a point in the cycle where it feels like greed is replacing fear. The capital sitting on the sidelines is going to be deployed; nobody on this panel wants to miss out on opportunities.”
The conversation then turned to deal specifics. Hochman discussed recent transactions, their approaches, and valuation metrics. “Our perspective this year was that the worst was behind us. While we didn’t know exactly when interest rates would decrease, we had the conviction to capitalize on the reduced buyer pool.”
He continued, “Earlier this year, we focused on acquiring newer vintage deals for value-added returns. We targeted properties built in 2000 or later in markets like Salt Lake City and Las Vegas. The sellers had held these assets for a long time, and we aimed for mid-teens returns on a five-year hold, leveraging agency financing.”
Hochman continued, “Looking ahead, we see opportunities in older properties from the ’80s and ’90s, where the buyer pool is smaller. We pivoted in the second half of this year back to our core business, focusing on states with job and population growth—primarily in the Sunbelt markets. We’ve steered clear of heavily regulated areas. While there is some oversupply in high-growth markets, we’ve noticed fundamental shifts in the ones we’re targeting, which indicate a potential for opportunity.”
Check back with GlobeSt.com for more from the GlobeSt. Multifamily Fall Conference.