Multifamily’s Perfect Secondary Market Storm

A perfect storm is brewing in U.S. multifamily thanks to demographic changes, which will continue to drive strong returns in secondary, tertiary and even suburban markets, according to a panel of experts interviewed about the art and science of multifamily investing by Zoe Hughes, Editor, PrivcapRE.

With unprecedented capital flows targeting major multifamily markets in the U.S., Joshua Grossman of LEM, Matt Pestronk of Post Brothers and Jeff Adler of Yardi Matrix discuss where the best secondary market opportunities exist; how cap rate spreads are compressing between secondary and major market suburban markets; and how value-added acquisitions require an in-depth, “bricks and sticks,” knowledge of sub-markets.

In a wide-ranging discussion, the trio also question whether over-development can occur thanks to demographics and how the multifamily real estate cycle will be an extended cycle.