- Sep 28, 2011
By Keat Foong, Executive Editor
Washington, D.C.—The Sunbelt may still be hot. Steve Pumper, executive managing director, Investment and Asset Services Group, Transwestern, believes there remains a lot of growth potential left in the warm southern states.
Citing what he calls his company’s “smile strategy,” Pumper says that Washington, D.C. and San Francisco, and many states south of these two markets, are likely to hold great promise for multifamily investors in the years ahead.
Multifamily investors know Transwestern as a privately held investment sales and research company that describes its business as “market centric.” It professes to “empower” its “local market leaders and producers” and cultivate “entrepreneurial thinking.” The company currently has 1,750 team members and 30 corporate offices across the nation. Ten of these offices provide multifamily investment sales services.
Two regions within the Sunbelt that the company is singling out for further multifamily expansion are South Florida and Southern California. The company is also in discussions to expand into Chicago, says Pumper. One of the reasons Transwestern is seeking to reach into these markets at this time is that the three most sought-after markets historically for institutional investors and REITs are Washington, D.C., South Florida and Southern California, says Pumper.
There is a huge appetite for multifamily properties located in the Sunbelt, adds Pumper. “We are already very well represented from Texas to Arizona.”
About 40 to 60 percent of Transwestern’s investment sales in the past five years have been multifamily, says Pumper. He adds Transwestern currently has exclusive listings for about 12,300 multifamily units through its offices in Washington, D.C., Atlanta, Dallas, Houston, Austin, San Antonio and Phoenix.
Pumper says that not only is there good job growth in many of the Sunbelt states, due to low tax rates and business-friendly governments, but also strong apartment fundamentals. Young people are beginning to move to apartments, and the members of this age cohort are willing to pay more to rent apartments as they are at an early part of their careers and want the flexibility to move. Moreover, underwriting on home loans remain tough, he adds, further discouraging homebuying.
Metro Washington, D.C., California, Georgia, Texas and Arizona are where Pumper sees a lot of job growth in the future. “The market for multifamily is fantastic. It is the number one, two and three most sought after asset for investors,” says Pumper.