El Paso's Multifamily Market Takes on COVID-19 by Jack Stone
Title: Director of Investment Sales, Greysteel
Published in: Texas Real Estate Business
As a multifamily investment sales brokerage firm, Greysteel has transacted close to 2,000 units in El Paso over the last 12 months.
To say the El Paso multifamily market has been hot would be an understatement. But with a sudden pandemic causing economic chaos, jobs are at risk and multifamily owners are facing ever-increasing pressure.
First, let’s talk about how El Paso has recently performed. Demand for multifamily product in El Paso has been particularly strong lately, and we’ve been able to bring new in-state and out-of-state investors into the market at cap rates never before seen in El Paso.
Many of these investors are surprised to learn that El Paso is the sixth-largest metropolitan area in Texas and the 18th-largest city in the country. As cap rates on multifamily properties have compressed across the United States, El Paso has offered a safe haven for higher yields that can be elusive in major markets with high levels of competition.
El Paso also has a diverse public/private sector that barely felt the pain of the 2008 recession — cumulative job losses totaled less than 3 percent of the total employment base. Job growth has expanded steadily, and employment was approximately 13 percent above the pre-recession peak in February.
Now, as we enter another bear market with COVID-19 putting most of the country in limbo, El Paso will, like every other market, feel some pain. If you’re reading this, you probably already understand what’s at risk.