By Jack Kern, Research Editor
In an age of increasing sophistication and complexity in placing capital in multifamily apartments, it seems we have a pretty paranoid view of markets. The only difference these days between a real estate research forecaster and a weatherman is that people will talk to a weatherman at a party. In real estate research, hardly a day goes by without the release of yet another Oracle from Everywhere offering a view towards what’s happening in a market. It seems not only “Dallas Does Well” sells but also “Cincinnati is Sinking” and “Lucky in Louisville.” To be honest, it is shocking to think that the sophisticated money managers placing capital in sponsors take any of this seriously. If someone were to suggest that buying this year’s model of last year’s most popular car was a sure winner, they’d be laughed off of the showroom floor. OK, so you probably do know someone like that, but at least they’re not running money for funds. Hopefully anyway, and with the current state of the industry showing slowing in some places, yesterday’s headline is a sure path to tomorrow’s foreclosure. Now I recognize that sending out a view towards recent market performance can have some value, but it is most helpful if you already have an investment in a growing market. Those that are chasing yield usually get to the closing table just as that desired yield disappears and is replaced by undisclosed expenses and a very reticent club fund committee of money managers.
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