Center stage for Multifamily housing
The multifamily market is in on hold as far new starts go with the exception of an odd permitting blip registered over the course of March, in which permit numbers spiked by 19%. That aside, researchers are predicting a slowdown in new construction starts as the market is full-up on Class-A product, and construction costs don’t allow for developers to build Class-B product.
Hamilton Zanze Real Estate Investments Chief Operating Officer and Founder Tony Zanze told HousingWire that the multifamily market has been a sellers’ market for about a year and a half now, and it doesn’t look like it will change anytime soon as the economy settles into slow growth and supply tapers off. LEM Capital Co-founder and Partner Jay Eisner agrees.
“Right now, we’re in a slow growth economy. Nothing’s crazy, but we’re still getting growth,” Eisner told HousingWire in an interview.
“It’s not a straight line up, there will be periods where rents drop off a bit, [vacancy] picks up a little bit, but over the long-term we’re going to continue to see increasing rents and good, strong occupancy,” Eisner added.
So, how does one navigate today’s sellers’ market? Eisner said that LEM Capital is putting it chips into product with subpar management and underutilized space in first ring suburbs, the areas just outside of main urban areas.