“You miss 100 percent of the shots you never take, and if you think it’s expensive to hire a professional to do the job, wait until you hire an amateur “ . ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net. . VIEW ALL OF WALTERS LISTINGS. Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE
By Blake Okland | Mar.Apr.18
Despite rumors to the contrary about multifamily’s growth, 2018 will be a seller’s market.
As long as off-market portfolio transactions and recapitalizations continue – keeping the amount of available deals and cap rates down – so will aggressive bidding. Even with transaction volumes at historic highs, several factors should fuel this demand cycle.
Absorption: Multifamily is expected to have strong absorption through 2019 as fewer apartments come to market.
Secondary markets: As secondary cities increasingly attract capital, expect more cap rate compression in those markets compared to large metros.
Tech hubs: After outpacing the national average by double digits since 2012, technology-driven employment hubs will maintain the strongest rental growth.
Cap rates: Each of these factors may further suppress broadly marketed activity and likely trickle into secondary and tertiary markets that have attracted capital as investors seek yield.
Ironically, it’s the prospect of these reliable dynamics that will shake up other aspects of multifamily next year.
Investor Shifts
Every capital food group wants exposure in a strong sector. Last year, about 66 percent of multifamily investors were private buyers, and the remaining 34 percent were institutional. Expect greater diversification during 2018 and new equity in the space, including more international capital.
International sources invested $11.3 billion in U.S. multifamily during the last year, according to ARA Newmark research. Expect heightened activity as high net-worth families and sovereign wealth funds shift their attention from trophy offices and hotels.
However, direct funding may be less common. International capital has become increasingly fond of identifying U.S. sponsors for multifamily investments.
Market Variations
Which markets will be hot in 2018? Look for secondary markets to continue to outpace primary markets, especially in the Southeast and Southwest. Three primary factors will affirm the frontrunners.
Extending 2017 success: Atlanta and Dallas are considered global gateways and have economic tailwinds helping – tax-friendly policies and robust job growth. Inventory in these cities is growing at twice the pace of the national average.
Chasing yield: Orlando, Fla., and Houston will maintain attractive yields, from the 5.1 to 5.5 percent range. Orlando finished 2017 with record sales volume. Houston continues to present a compelling story, as oil markets stabilize and the impact of Hurricane Harvey pulled significant single and multifamily offline, substantially driving up marketwide occupancy and providing new support for rent growth.
Surging cities: Seattle, Denver, and Raleigh-Durham, N.C., forecast rapid growth. However, institutional capital could give the edge to Salt Lake City’s strong tech base or to San Diego’s transition with new mid-rise and high-rise development.
Sector Evolution
Though conventional multifamily outshines sector interest, 2018 will put the spotlight on three niches.
Student housing: Since proving itself recession-resilient, this sector is becoming a favorite among institutional buyers and international investors, delivering new equity to multifamily. More than 33 percent of 2017 deals tapped international capital, up from 20 percent in 2016.
Seniors: Active adult activity will thrive. Cap rates should remain stable as more investors – global, private equity, and public and private REITs – drive development and acquisition in markets with high barriers to entry.
Affordable housing: Affordable has become a buzzword among niche players and institutions since Starwood’s grand entrance with the purchase of a $500 million portfolio. Expect a steady flow of deals as properties reach the 15-year investment horizons. While yields may compress, they’ll stay stronger than conventional growth without relying on substantial hikes in rent.
Debt Market Movement
Debt capital for well-positioned assets will remain plentiful despite a pullback in the CMBS market. Meanwhile, government-sponsored entities, banks, and life insurance companies are expanding their outstanding debt.
Lending across major metros will continue to benefit from regional banks expanding their real estate balance sheets, while larger national banks remain more risk-averse.
Strong Forecast
Overall, employment growth remains positive nationwide, strengthening demand for multifamily and bringing welcome change across the industry. These advances encompass greater diversification of investors, an influx of new equity, shifts among lending sources, and sector evolutions. Even disruptions from short-term rentals should start to ease up and work in concert with apartment owners. Through 2018 and beyond, expect multifamily to make the most of these fluctuations.
Blake Okland
Blake Okland is vice chairman and head of U.S. Multifamily at ARA, a Newmark company, in Charlotte, N.C. Contact him at okland@areanewmark.com.
SEE IT ALL: https://www.ccim.com/cire-magazine/articles/2018/03/full-speed-ahead/
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
VIEW ALL OF WALTERS LISTINGS. Let me know if you are interested in Apartments: CLICK HERE FOR APARTMENTS FOR SALE.
KASTEN LONG Commercial Group and AMA Events, Resources & Education For Apartment Owners
Timeline of Arizona from 900 BC – 2017
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
FROM ME:
Phoenix Commercial Real Estate and Investment Real Estate: Investors and Owner / Users need to really know the market today before making a move in owner user Commercial Properties, Investment Properties and land in Phoenix / Maricopa County, Pinal County / Arizona, as the market has a lot of moving parts today. What is going on socio-economically, what is going on demographically, what is going on with location, with competing businesses, with public policy in general — all of these things affect the quality of selling or purchasing your Commercial Properties, Commercial Investment Properties and Commercial and large tracts of Residential Land Therefore, you need a broker, a CCIM (Certified Commercial Investment Member) who is a recognized expert in the commercial and investment real estate industry and who understands Commercial Properties and Investment Properties. I am marketing my listings on Costar, Loop-net CCIM, Kasten Long Commercial Group. I also sold hundreds millions of dollars’ worth of Investment Properties / Owner User Properties in Retail, Office Industrial, Multi-family and Land in Arizona and therefore I am working with brokers, Investors and Developers. I am also a CCIM and through this origination ( www.ccim.com ) I have access to marketing not only in the United States, but also internationalClick here to find out what is a CCIM: https://en.wikipedia.org/wiki/CCIM
PLEASE CALL ME 520-975-5207 OR E-MAIL ME walterunger@ccim.net
ARE YOU READY TO SELL OR PURCHASE YOUR LAND OR COMMERCIAL BUILDING IN PHOENIX, SCOTTSDALE, MARICOPA COUNTY AND PINAL COUNTY, ARIZONA, CLICK HERE AND PLEASE CALL ME. 520-975-5207 or email me walterunger@ccim.net
CLICK HERE for Map of Apartments Under Construction or in Pipeline.
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WEEKLY APARTMENT CLOSING UPDATE THROUGH March 9, 2018, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH March 2, 2018, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH February 23, 2018, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH February 16, 2018, Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH February 9, 2018/ Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH February 2, 2018/ Phoenix Arizona Metro.
WEEKLY APARTMENT CLOSING UPDATE THROUGH January 25, 2018/ Phoenix Arizona Metro.
8 Reasons You Should Invest in Land
Timeline of Arizona from 900 BC – 2017
WHY PHOENIX? AMAZING!!! POPULATION IN 1950 – 350 K PEOPLE; “NOW 5 MIL”. – “5TH. BIGGEST CITY IN USA”
DOT – LOOP 202 / SOUTH MOUNTAIN FREEWAY / PHOENIX AZ – UNDER CONSTRUCTION
ARIZONA FACTS – YEAR 1848 TO 2013
- DEMOGRAPHIC FACTS ABOUT MARICOPA COUNTY:
- The average age of the population is 34 years old.
- The health cost index score in this area is 102.1. (100 = national average)
- Here are some of the distributions of commute times for the area: <15 min (22.7%), 15-29 min (36.8%), 30-44 min (25.1%), 45-59 min (8.6%), >60 min (6.8%).
PHOENIX PROJECTED AS NUMBER ONE US HOUSING MARKET FOR 2017
LIST OF ECONOMIC DEVELOPMENT PROJECTS IN PINAL COUNTY, REVISED 2-14-17
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2016 Official Arizona Visitors Guide
Timeline of Phoenix, Arizona history
Facts of Arizona – year 1848 to 2013
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I am a successful Commercial / Investment Real Estate Broker in Arizona now for 20 years. If you have any questions about Commercial / Investment Properties in Phoenix or Commercial / Investment Properties in Arizona, I will gladly sit down with you and share my expertise and my professional opinion with you. I am also in this to make money therefore it will be a win-win situation for all of us.
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Walter Unger CCIM
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