‘The Accidental Economist’ with Jack Kern: NMHC Has Great Parties
- Jan 24, 2011
I just got back from the National Multi Housing Council’s annual apartment festival, and to tell you the truth, I had a great time. For one thing, I never saw so many ruby slippers on acquisition and development guys, wandering around waiting to click their heels together to end up in Kansas. Apparently off-market and non-core deals are becoming all the rage as yield meets cornfields and the wide-open plains. Being a St. Louis boy (go Cardinal nation), I suppose that it’s only fitting that the Midwest somehow ended up being part of the acquisition binge again.
Did I mention all the parties and free food and booze?
“Still crazy after all these years,” as Paul Simon likes to say, is a great description of the vast tranche of money chasing deals all over the country. For those of you who were unable to attend the meeting, there were some terrific sessions on market trends, best practices and even a scolding by a very well known CEO who warned his colleagues not to “screw things up this time.” I liked that session a lot.
Most of the time being in research is a buzz kill because you listen intently to the panelists extolling the virtues of their positions but—as someone who is a big believer in statistical evidence—it kind of makes you wonder. I’d love to be able to spend these meetings wandering around with an idiot grin, like a cheshire cat, waiting for the next deal to fall into my lap, but as the smoke clears, what is left isn’t often what we started with. Let me give you an example.
When I was growing up in tiny Creve Coeur Missouri, we had lots of tornadoes and they frequently touched down, destroying neighborhoods and villages on a pretty regular basis. You could hear the freight-train roar of the wind and feel the concrete basement walls vibrate. Since the walls were about 10 inches thick—partly to keep the houses from blowing away and partly to enrich the concrete company—you gained a newfound respect for what tornadoes could do. When it was all over, inevitably on the news they’d interview a local contractor and ask them how it was going, and they’d always reply, “Well, business has never been better.”
In mid-2007, as I forecasted to those of you who read me, the recessionary wind started blowing across the multifamily plains, and when the economic storm finally struck, there was a lot of damage. Fast forward to 2011 and the brokers and lenders will tell you business has never been better.
It really makes you wonder.
Jack Kern is a partner and chief economist at Palatine Capital Partners in New York and managing director at Kern Investment Research, LLC. He also serves as research editor for Multihousing News and Commercial Property Executive. As a singer and composer, his most recent recording of “Let It Rent,” was released by his garage band Research Tool, and is expecting to bounce around on the bottom of the charts. Jack is a frequent speaker at commercial real estate events and can be reached at JKern@KernIRC.com.