Multifamily Investments During COVID-19 by Jack Stone
Title: Director of Investment Sales, Greysteel
Published in: D Magazine
With a bear market at hand, everyone is eyeing rental collections for the next few months and many are adopting a "wait and see" approach, says Greysteel Director Jack Stone.
Fluid. That’s the best word to describe the current state of multifamily housing during the Coronavirus pandemic.
As I write this, counties and states are creating their own piecemeal responses to the virus. The economy is taking a hit, and the impact is being felt in every facet of life, including the multifamily sector.
First, let’s not forget how well Dallas-Fort Worth performed just before COVID-19. It added more than 130,000 new residents last year (more than any other in the country), over 112,000 new jobs, and has roughly 740,000 units of apartments (the third-largest market in the country).
Investors started pouring in from markets like New York and Los Angeles, attracted to the robust economic drivers, low cost of entry, and solid multifamily fundamentals. Average sales pricing appreciated almost 140 percent since the beginning of the cycle, outpacing the U.S. norm. And the average cap rates have compressed more than anyone could have imagined (a decade ago we saw cap rates at 7 percent to 8 percent versus 5 percent to 6 percent just before the downturn).