At the recent ULI and NMHC meetings, if there was one question on everyone’s mind it was whether the market is becoming overheated. There are several reasons for investor exuberance over multifamily—demand is up, valuations and rents are rising, and vacancy rates are falling. But is it sustainable? To get an insider perspective, I consulted a couple of experienced investors, Jeff Allen, CEO of Raintree Partners in Southern California, and Sam Goldstein, CFO at the Galman Group in the Philadelphia area.
The short-term outlook is selectively positive
Both Jeff and Sam are bullish on the market—and Jeff ticked off a number of specific factors that lead him to be optimistic, at least over the short term. He noted that Gen Y is entering the marketplace, and that for the large cohort of recent immigrants, renting is still the rule. But he also pointed to “steady population growth at a time when there seems to be a cultural shift in attitudes towards renting.” In other words, they see multifamily demand drivers as a whole remaining very strong.
Read more...Is Multifamily Too Hot? | Multi-Housing News Online