BABY STEPS

For multifamily tenants, checking out the cute guys (or girls) in 2B still outranks worrying about a spike in rent. But those cost increases may be on the way as rent growth gains some traction (albeit in baby steps).

Henry S. Miller Realty Management VP Brian Whisnand sees rent growth gaining traction . . . gradually. (Pictured is Saddlebrook, a HSM Realty Management managed complex at Keller Springs and the Tollway.) Occupancy is firming on Class-A properties and on well-located Class-B. (Sorry, Class-C, but you're hit and miss based on location and proximity to employers.) Rent growth for Class-C assets ranges from very modest to  almost nothing because wage growth for those tenants has been non-existent. On the transaction side, Brian says, HSM has clients asking for speedy back of the napkin underwriting guestimates to see if they're in the ballpark at X number of dollars per unit.

Brian was blunt: There are a lot of buyers looking for value-add deals that are priced too high. The difference between what sellers are asking and what buyers can underwrite and get financing for is still a pretty wide gap, he tells us. The deals getting done are paying cash because they can't get a loan based on the underwriting; many are including future income and that's part of what got us into this trouble to begin with. Brian and his wife live in Whitewright where they raise registered Red Angus cattle, donkeys, horses, and goats on more than 350 acres. He spends much of his daily Dallas commute returning and making phone calls. He'll help make the most of your time if you come hear him and a plethora of multifamily experts at our second annual Bisnow DFW Multifamily Summit on June 29 at the Westin Galleria. Join us.