Apartments Remain Strong as the Cycle Matures
Source: globest.com | Re-Post MNM Partners, LLC 2/5/2019 –
CALABASAS, CA–There’s growing talk of a plateauing economy as we dig deeper into 2019. And by now you’ve heard the typical hand-wringing over the direction of interest rates. Then there are those who take the long view, folks such as John Sebree, national director and first VP of the National Multi Housing Group of Marcus & Millichap. Of course, it doesn’t hurt that, as much as possible in commercial real estate, multifamily has been a constant winner.
“Multifamily fundamentals remain strong, though some investors are showing a bit more caution,” Sebree says, “which is typical when you get late in the cycle. Countering this has been a tremendous influx of new capital into the sector. Also, the Fed has raised the funds rate nine times, supposedly to pump the brakes on the economy, and it looks like it has had the desired effect.” Another drag on the perception of health is the recent wild ride of the stock market, and all these factors taken together result in what the firm’s newly released North American Multifamily Forecast refers to as lender caution, “adopting tighter underwriting standards but aggressively competing to place capital into apartment assets.”
Which in turn speaks to multifamily’s resilience. Sebree describes the sector as “very stable, with very stable fundamentals. There are land mines going off around us but they’re not affecting the multifamily industry.”