Investment Q&A: Outlook for 2017
Colliers International’s Christopher Sower evaluates today’s multifamily market and gives his insights into the year to come.
In a career that’s spanned more than 15 years, Christopher Sower, Colliers International’s senior vice president of multi-family investments, Boston, has closed more than $5.3 billion in multifamily sales volume, representing over 35,750 apartment units.
In his role, Sower is responsible for the creation and execution of acquisition and disposition strategies, and joint venture opportunities in middle-market multifamily investments on behalf of clients throughout the Northeast.
Prior to joining Colliers, he served as managing director & senior partner at Boston Realty Advisors.
MHN: With 2016 coming to a close, how would you characterize the year as far as multifamily investment opportunities?
Sower: 2016 has been a very strong year for multifamily investment sales. Boston has been very fortunate enough to be one of the top markets in the country for investment sales and continues to be on top of most investors’ radars.
MHN: What trends did you see develop throughout the year?
Sower: One of the more interesting trends that we have seen this year is the continued emergence of international investors and developers. These investors/developers are driving certain parts of the market and seem to view the U.S. as a good investment option for growth and security. Another trend that has developed, in Boston particularly, is the strength of the condo market. We are seeing a number of developments that are selling in pre-construction with very strong sell out velocity. Most condo development has been new construction or redevelopment of existing buildings and fewer conversions of existing multifamily properties.
MHN: What was your strategy going into 2016, and looking at it now, how did it pay off?
Sower: Our strategy going into 2016 was to stay focused on our core market of middle markets multifamily housing. We feel that this segment of the market is very strong and are very happy with the results our clients have seen in 2016.
MHN: What do you foresee in 2017? What can we expect in the year ahead?
Sower: We expect another strong year for 2017. The market will be watching new supply/inventory in certain markets/sub markets and will be watching the capital markets/interest rate environment very closely.
MHN: What’s on your radar in the next 12 months that will affect multifamily investing?
Sower: We believe the trend of transit-oriented multifamily communities will continue to drive investor interest moving into 2017. Many of these communities with existing transportation have not seen new multifamily construction; new developments are dramatically changing the look and feel of these communities. Multifamily housing is usually the first product to be developed, which then opens the path for mixed-use, retail and office space.
MHN: What do you feel is the most important thing that investors need to be aware of in today’s multifamily environment?
Sower: We feel that the capital markets will be the driving force for 2017 multifamily investment. Investors/developers need to be aware of where the markets are currently, as well as future forecasts, while also having a good understanding of how lenders are underwriting potential financing opportunities.