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محتوای ارائه شده توسط Blue Lake Capital. تمام محتوای پادکست شامل قسمت‌ها، گرافیک‌ها و توضیحات پادکست مستقیماً توسط Blue Lake Capital یا شریک پلتفرم پادکست آن‌ها آپلود و ارائه می‌شوند. اگر فکر می‌کنید شخصی بدون اجازه شما از اثر دارای حق نسخه‌برداری شما استفاده می‌کند، می‌توانید روندی که در اینجا شرح داده شده است را دنبال کنید.https://fa.player.fm/legal
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Is Stability Returning to Multifamily? Top Trends Shaping the Markets in 2023 with Ryan Rasieleski; ep 301

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Manage episode 364189597 series 2439884
محتوای ارائه شده توسط Blue Lake Capital. تمام محتوای پادکست شامل قسمت‌ها، گرافیک‌ها و توضیحات پادکست مستقیماً توسط Blue Lake Capital یا شریک پلتفرم پادکست آن‌ها آپلود و ارائه می‌شوند. اگر فکر می‌کنید شخصی بدون اجازه شما از اثر دارای حق نسخه‌برداری شما استفاده می‌کند، می‌توانید روندی که در اینجا شرح داده شده است را دنبال کنید.https://fa.player.fm/legal

Real estate markets in 2023 have seen many changes compared to the previous year. To gain a better understanding of these developments, we were joined once again by our own Ryan Rasieleski to share his insights on how '23 is playing out differently.

He discusses the stabilization of the multifamily real estate market, rental growth trends, transaction volume & the impact of the Federal Reserve's actions. Additionally, since we're buying a new asset in the market, we get his perspective on Phoenix, Arizona to understand its unique dynamics.

Is Multifamily Stabilizing?

Ryan believes the multifamily real estate market is gradually stabilizing after a period of low vacancy rates, high rent growth, and low interest rates. In the first quarter of 2023, vacancy increased by about 30 basis points, nearing the industry standard of 5%.

Although there was negative absorption in Q1, indicating a pre-leading demand, Ryan anticipates a positive absorption in Q2. Average effective rents grew by 4.5%, signaling a healthy indicator of stability compared to the unsustainable rent growth of previous years.

Insights on the Phoenix Market

The Phoenix market has some unique characteristics.

The market's shown resilience & remains attractive to investors due to factors such as population growth, strong job market, & favorable business environment. Ryan emphasizes the importance of infill locations and their potential for appreciation in value over a 7-10-year period. He also notes that leverage in the market is gradually returning to more typical levels, reducing the amount of equity required for investments.

Impacts on Underwriting & Capital Markets

The changes in interest rates & market dynamics affect underwriting practices & capital markets. Loan assumptions are still trading at a premium, but there has been a shift towards longer-term loans with a flexible prepayment buy-down options. Depending on the business plan & property location, terms are adjusted accordingly. Ryan mentions the importance of leveraging agency programs and the return of leverage in the market, reducing required equity. These factors enable investors to structure deals more effectively.

Buyer-Seller Negotiations & Pricing

There's been a significant disconnect between buyer and seller expectations. However, the market has undergone a change, with the bid-ask spread collapsing by nearly 50%. Expectations of buyers and sellers are aligning more closely, resulting in more realistic pricing. The average cap rate in Q1 of 2023 was around 5.3%, indicating a contraction of the bid-ask spread.

Operational Considerations:

From an operational standpoint, there hasn't been much fluctuation compared to the previous year. The focus on expense discipline remains essential, especially for groups preparing for a sale. The emphasis on reducing expenses, such as payroll, has been instrumental in optimizing financial statements to maximize transaction value.

Key Takeaways:

  1. The multifamily real estate market is stabilizing, with vacancy rates increasing and rental growth moderating.
  2. Interest rates, recession concerns and consumer confidence continue to contribute to market uncertainty.
  3. The massive disconnect between buyers and sellers expectations that was prevalent in the past is beginning to diminish. The spread between initial offers and final pricing has decreased, with cap rates decompressing.

Are you REady2Scale Your Multifamily Investments?

Learn more about growing your wealth, strengthening your portfolio, and scaling to the next level and visit www.bluelake-capital.com.

To connect with Jeannette & her team directly & find out how to invest alongside Blue Lake, email them at info@bluelake-capital.com or just complete our potential investor form at https://www.bluelake-capital.com/new-investor-form and they'll be in touch with you.

If you'd like to be on our podcast or know someone who should, visit https://www.bluelake-capital.com/podcast and click the link to submit a guest.

Learn more about your ad choices. Visit megaphone.fm/adchoices

  continue reading

346 قسمت

Artwork
iconاشتراک گذاری
 
Manage episode 364189597 series 2439884
محتوای ارائه شده توسط Blue Lake Capital. تمام محتوای پادکست شامل قسمت‌ها، گرافیک‌ها و توضیحات پادکست مستقیماً توسط Blue Lake Capital یا شریک پلتفرم پادکست آن‌ها آپلود و ارائه می‌شوند. اگر فکر می‌کنید شخصی بدون اجازه شما از اثر دارای حق نسخه‌برداری شما استفاده می‌کند، می‌توانید روندی که در اینجا شرح داده شده است را دنبال کنید.https://fa.player.fm/legal

Real estate markets in 2023 have seen many changes compared to the previous year. To gain a better understanding of these developments, we were joined once again by our own Ryan Rasieleski to share his insights on how '23 is playing out differently.

He discusses the stabilization of the multifamily real estate market, rental growth trends, transaction volume & the impact of the Federal Reserve's actions. Additionally, since we're buying a new asset in the market, we get his perspective on Phoenix, Arizona to understand its unique dynamics.

Is Multifamily Stabilizing?

Ryan believes the multifamily real estate market is gradually stabilizing after a period of low vacancy rates, high rent growth, and low interest rates. In the first quarter of 2023, vacancy increased by about 30 basis points, nearing the industry standard of 5%.

Although there was negative absorption in Q1, indicating a pre-leading demand, Ryan anticipates a positive absorption in Q2. Average effective rents grew by 4.5%, signaling a healthy indicator of stability compared to the unsustainable rent growth of previous years.

Insights on the Phoenix Market

The Phoenix market has some unique characteristics.

The market's shown resilience & remains attractive to investors due to factors such as population growth, strong job market, & favorable business environment. Ryan emphasizes the importance of infill locations and their potential for appreciation in value over a 7-10-year period. He also notes that leverage in the market is gradually returning to more typical levels, reducing the amount of equity required for investments.

Impacts on Underwriting & Capital Markets

The changes in interest rates & market dynamics affect underwriting practices & capital markets. Loan assumptions are still trading at a premium, but there has been a shift towards longer-term loans with a flexible prepayment buy-down options. Depending on the business plan & property location, terms are adjusted accordingly. Ryan mentions the importance of leveraging agency programs and the return of leverage in the market, reducing required equity. These factors enable investors to structure deals more effectively.

Buyer-Seller Negotiations & Pricing

There's been a significant disconnect between buyer and seller expectations. However, the market has undergone a change, with the bid-ask spread collapsing by nearly 50%. Expectations of buyers and sellers are aligning more closely, resulting in more realistic pricing. The average cap rate in Q1 of 2023 was around 5.3%, indicating a contraction of the bid-ask spread.

Operational Considerations:

From an operational standpoint, there hasn't been much fluctuation compared to the previous year. The focus on expense discipline remains essential, especially for groups preparing for a sale. The emphasis on reducing expenses, such as payroll, has been instrumental in optimizing financial statements to maximize transaction value.

Key Takeaways:

  1. The multifamily real estate market is stabilizing, with vacancy rates increasing and rental growth moderating.
  2. Interest rates, recession concerns and consumer confidence continue to contribute to market uncertainty.
  3. The massive disconnect between buyers and sellers expectations that was prevalent in the past is beginning to diminish. The spread between initial offers and final pricing has decreased, with cap rates decompressing.

Are you REady2Scale Your Multifamily Investments?

Learn more about growing your wealth, strengthening your portfolio, and scaling to the next level and visit www.bluelake-capital.com.

To connect with Jeannette & her team directly & find out how to invest alongside Blue Lake, email them at info@bluelake-capital.com or just complete our potential investor form at https://www.bluelake-capital.com/new-investor-form and they'll be in touch with you.

If you'd like to be on our podcast or know someone who should, visit https://www.bluelake-capital.com/podcast and click the link to submit a guest.

Learn more about your ad choices. Visit megaphone.fm/adchoices

  continue reading

346 قسمت

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