Trends Watch: Multifamily Real Estate

EisnerAmper’s Trends Watch is a weekly entry to our Alternative Investments Intelligence blog, featuring the views and insights of executives from alternative investment firms. If you’re interested in being featured, please contact Elana Margulies-Snyderman.  

This week, Elana talks with Glenn Hanson, CEO, Colony Hills Capital.

What is your outlook for multifamily real estate?

My outlook on the multifamily real estate market is that it's a solid market, and there are still great investment opportunities, in particular throughout the Southeast.

There's a lot of talk about cap rates being low, deals that can't be found, and chatter about people paying too much. In our view, there are still plenty of great opportunities, and we have a solid pipeline of new deals. Of course, we have to work harder to find them, but nonetheless, they are there. Finally, if you have a long-term hold mindset, the horizon is loaded with sunshine and opportunity.  There will be ongoing demand, especially for workforce housing.  One of the primary reasons we focus on the Southeast is that's where the jobs are being created, hence the housing demand will follow.  Any temporary pullback will be overcome by a tremendous tenant demand pent up in the marketplace. 

What are the greatest opportunities and why?

The greatest opportunities for us are ones where the person who can make the deal happen wins.  Don't make excuses. Wrestle the deals down and close them.  That approach allows us to discover opportunities where others are not looking. 

What are the greatest challenges and why?

The greatest challenges in the multifamily market for somebody like us is that although our knowledge base is solid, our understanding deep, and our track record of closing strong, at the end of the day it can sometimes still be difficult to explain the positive nuances of a specific deal to investors.  Multifamily has become one of those areas of investment where investors now have a fair amount of knowledge but not necessarily expertise.  That tends to make them focused often on what they hear rather than what's actually out there.  A tendency to focus on the external hair that might be on a deal rather than the strength underneath.  Given that, risk mitigation is the watch word, to bring our expertise together with the right capital remains, as it always has, the primary challenge.

What keeps you up at night?

At this stage, not too much. We've weathered several challenges including economic downturns, and now a pandemic.  Multifamily real estate continues as a business where dedication, discipline, and focus create success.  That's all anyone in any business can ask.

The views and opinions expressed above are of the interviewee only, and do not/are not intended to reflect the views of EisnerAmper.