Conclusion: Do Not Sell

By Keat Foong

Speakers at a panel at the Multi-Housing World 2008 Conference and Exhibition held in Denver came down squarely against placing apartment properties on the market.

The session was titled Apartment Investment Cycle: Is it Time to Sell, Hold or Buy?

"Do not sell unless you have to," said Ronald Brock, president and CEO, Pierce Eislen Inc. "This is not the time to be selling."

"Do not sell. This is not the time to be a seller," said Keith Rosenthal, co-founder and president of Phoenix Realty Group, echoing Eislen. 

Brock, a market researcher, said rental apartment conditions are "darn good." The fundamentals are excellent, and there will be continued slowdown in development, he noted.

If anything, Rosenthal said developers should buy. He said he expected apartment prices to continue to go down. But because they cannot time the market precisely, developers can "buy on the way down" and "buy on the way up."

"We are still buyers, and we think others should be too," said Rosenthal.

He said there will be a wave of overleveraged and other pressured sellers bringing apartment properties onto the market soon. There is a "tremendous amount of money to be made in repositioning" for players who have development and operating skills and who can deleverage the properties, he said.

Is there a consensus that despite the sense the U.S. may be on the brink of financial meltdown, developers should be buying apartments now? If not, when?