Apartment Properties Are Still Decent Investment Prospects, Says ULI

By Anuradha Kher, Online News EditorNew Brunswick–At a time when uncertainty about the economy and the housing market, along with the state of the credit markets, has stalled new project development, the Northern New Jersey District Council of the Urban Land Institute (ULI-NNJ) is projecting optimism about the recovery of the housing sector. “This crisis is an opportunity to redefine fundamentals,” ULI-NNJ Chair Lawrence F. Jacobs of the law firm of Wilentz, Goldman and Spitzer said at the Emerging Trends in Real Estate conference held in New Jersey recently. “ULI believes that the market will take a critical approach to land values based on demand, which may result in a conservative attitude towards development opportunities.”While the multifamily starts released by the Commerce Department yesterday were 80 percent higher in February (212,000) compared to the previous month, the number is still one of the lowest it has been in many years (Click here to read this story on MHN.) However, according to Susan Smith, senior adviser for ULI “Emerging Trends in Real Estate” and manager of the real estate services group at PricewaterhouseCoopers, this may not be a bad thing. “2009 is an opportunity year. With little in the development pipeline, existing properties stand to benefit from the recovery,” she said.The silver lining in the economic cloud is in the form of a rich source of equity that “is looking for a place to land,” she added. As far as investment prospects go she listed apartment properties at the top of the list calling them “decent.”She also talked about a “flight to quality,” with urban infill locations in 24-hour cities on global pathways being given the highest ranking for investment and New York ranking among the top on the East Coast.Richard Johnson, senior vice president of Matrix Development Group pointed to green building as one of the new opportunities to explore. “We’re dealing with the consequences of looking the other way when home buying sky rocketed. We can’t run and hide. We should use the down-time to mine unique assets that we haven’t mined enough, such as green.”