News
THIS MORNING ON MULTIFAMILY
April 22, 2010
| Like your winter wardrobe, pack away your doom and gloom. Both national and local multifamily experts gave a dose of optimism to the 425 attendees at Bisnow's first ever Multifamily Summit & Schmooze, held this morning at the NY Bar Association. |
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| The national panel of Arent Fox's David Dubrow, Ackman-Ziff's Pat Hanlon, Stellar Management's Robert Rosania, Eastdil Secured's Adam Spies, and Westbrook Partners' Avi Banyasz. Demand for rental product has increased nationally, Robert says, noting that the number of institutionally owned units have decreased from 19M to 17M in a decade. Adam sees a host of capital dedicated to the sector, while we're seeing a shift from debt to equity, Pat adds. For opportunistic investors, this is the most difficult asset class because it trades like bonds, Avi says; despite unique opportunities that have popped up over the past year, product will be harder to find as both equity and investors return to the sector. |
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| For a NY-centric view, we turned to Stonehenge Partners' Ofer Yardeni, Meridian Capital Group's Ralph Herzka, Tahl Propp Equities' Joe Tahl, Vantage Properties' Neil Rubler, Massey Knakal's Bob Knakal, and WeiserMazars' Ron Lagnado. Post-Lehman, luxury rental market rents declined up to 30% and expenses increased, leading to panic in '09, notes Ofer—but we've since seen a turnaround, and more people are moving to NYC than leaving. The rent declines only hit marked-to-market units, Neil says, noting that rent-stabilized and rent-controlled units continue to perform well. There's a more optimistic feel to the market, Bob confirms, but sales transactions have yet to pick up. |
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| We'd need to invest in a panoramic camera to capture all of you! One issue the local panel touched upon was the worsening tax issues in NYC—there has to be some kind of subsidy, because taxes have jumped to $6 PSF, and 30 cents of every rental dollar is going toward them. All expenses have skyrocketed, including oil, gas, and maintenance, so operating costs have been squeezed, says Joe. Despite these issues, NYC multifamily outperformed every single sector in the US in '09, and there's a real opportunity for borrowers to take advantage of low interest rates, Ralph notes. |
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| CBRE's Christina Capowich and Christopher Leonard flank Bluestone Realty Advisors' Patrick Bisceglia. CBRE has been involved in a few multifamily deals of late, including the $17.25M refinancing of the 45k-SF, 42-unit rental/mixed use 44 Berry St. in Williamsburg, Brooklyn, through its Capital Markets Debt & Equity Group. |
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| Multifamily isn't the only business picking up. DLA's Rob Hellman(right, with Hartman & Craven's Eliot Zuckerman and Tracey Daniels) tells us that his firm is seeing an increase in IPO business as the market expands, and on the consulting side, an uptick in construction auditing and asset management for private equity funds. Hopefully he'll also see an increase in winning games for his softball team, which he plays with every Sunday in Mamaroneck. |
