Jeffrey Weidell, NorthMarq’s chief executive officer, hosted a virtual discussion about multifamily, including how the impact of 2020 will drive activity in 2021.
This event featured his discussion with Michele Evans, executive vice president and head of Fannie Mae Multifamily, and Debby Jenkins, executive vice president and head of Freddie Mac Multifamily, about the roles of the GSEs in retaining liquidity of the market, along with an economic overview and predictions from Dr. Victor Calanog. Finally, Jeff Erxleben, executive vice president/regional managing director-Debt and Equity, and Trevor Koskovich, president-Investment Sales, held discussions about multifamily investment opportunities with multifamily owner/operators from MORE Residential and TruAmerica.
A FEW KEY FINDINGS:
From Dr. Victor Calanog: The economy and the political climate – will drive the health of the multifamily property type in 2021. The good news is there is pent up demand from people who are already doubling up, and a continued slowdown in construction has constrained supply. This means the multifamily asset class remains a strong investment opportunity for long and short-term investors. However, cracks are starting to appear in many markets where rent collection is declining, especially with the end of government intervention through stimulus checks.
Fannie Mae and Freddie Mac both continue to pursue technology improvements to speed the transaction process for both lenders and borrowers. They also are focused on the ESG category – environmental, social, and governance – by funding properties that support those initiatives. In both agencies, they continue to fund mission-driven investments across the country, working to ensure that workforce housing is supported. They noted that in most of the urban core markets across the country, properties have declining occupancy and rent rolls, but suburban properties are seeing strength in rent and development projects.
Perspectives from owner/operators: Mark Alfieri and Noah Hochman shared their investment strategies for 2021, and provided more background on their investment targets:
- MORE Residential, where Mark is CEO, invests in Class A properties, primarily on the West and East Coasts and Texas. He predicts a shift to development in the suburbs in most markets due to strong CBD development pipelines of the last cycle, but doesn’t think that living in the CBD’s has lost favor forever. He believes the core of most large cities will rebound due to massive investments in infrastructure, including transit, infrastructure, and entertainment amenities.
- TruAmerica, where Noah is co-chief investment officer, invests in workforce housing across many markets in the U.S., and is seeing strong performance across their portfolio, as residents protect their housing situation by staying current on rent payments. He said TruAmerica will continue to focus on that niche of the market because he believes that housing supply is still not meeting the needs of the country. However, he is paying more attention to regulatory changes in specific markets, due to potential constraints in rent and development.