Multifamily is Awash in Capital

By Diana Mosher, Editorial Director

We were invigorated last month when we kicked off the new year at two of the industry’s most important events. Scheduled concurrently in January, the NMHC Annual Meeting with Apartment Strategies conference in Orlando and the NAHB Builders’ Show in Las Vegas both offer exceptional networking and educational opportunities. At the Builders’ Show I was tasked with finding the most interesting products for the “30 in 30” presentation at NAHB’s popular Multifamily Central educational and networking hub. See my picks along with those of my co-presenters, Steve Martinez, architect at Kephart and Britney Gilley, design director at Builders Design.

The mood at the show was upbeat. In fact, sales of newly built, single-family homes rose 14.5 percent to 501,000 units in 2015; the highest level since 2007, according to newly released data from the Department of Housing and Urban Development and the U.S. Census Bureau. But spirits were just as high in Orlando, where NMHC panelists and attendees recounted the many reasons it’s a great time to be in apartments. According to Yardi Matrix Associate Director of Research and MHN Contributing Editor Paul Fiorilla, “The litany of positive fundamental drivers are familiar by now: vacancy rates are near historical lows, with demand driven by strong job growth, the growing number of Millennials and the increasing propensity to rent among young and older renters. Rent growth since the last recession has far outpaced long-term average, while properties values have soared.”

Read Fiorilla’s Special Report here with insights from Craig Leupold, president of Green Street Advisors, Jonathan Holtzman, CEO of Village Green, and Grace Huebscher, president of Capital One Multifamily Finance. In this February issue of MHN Digital Magazine, our focus on finance and investment includes a profile of Huebscher (“Poised for Growth,” page 20). After setting up multifamily lending company Beech Street Capital in 2009, she quickly ramped it up to a $1 billion origination volume in the first year. Now, under the Capital One umbrella, there is further scope for growth.

Also in this issue, our capital markets forecast (“Clear Skies Ahead,” page 25) features predictions by a number of lenders. There will be plenty of available capital, but underwriters aren’t throwing caution to the wind. As more inventory comes on line, will multifamily remain the darling among lenders?