September 2023 – Navigating the Shifting Tides of Real Estate
The Multifamily Investment Environment
Rental rates are beginning to cool as the once-hot apartment market has posted negative rent growth of 1.2% over the last 12-months according to the September 2023 Apartment List National Report. This is not surprising as the end of the cycle caught the market with roughly 520k new units scheduled for delivery (the largest pipeline since the early 1970’s).
The transaction market remained flatlined during August with the standoff between buyers and sellers resulting in roughly an 11% gap between bid and ask pricing. It should be noted, that Essential Realty Partners noted a substantial pickup in listed deal activity as more and more sellers are beginning to try and get in front of additional valuation drops (already at -21% according to Green Street).
Borrowers quadrupled loan modifications in the 2nd quarter of this year as the market entered the extend and pretend phase. Many of these modifications will only prolong the eventual need to reset property valuations as the interest rate environment reverts to mean.
All in all, the market pricing still has ways to go before we begin to see normal transaction velocity. Even so, disciplined, and patient investors (such as Essential) are active and seeking early opportunities.
Last Month in Essential Realty Partners
A crazy, crazy travel schedule – the only way to cover 15 target markets containing over 400k units of potential opportunity!
Property tours are a prerequisite for offers to be taken seriously. Aided by our platform’s predictive analytics, Essential is currently targeting 15 markets across the country. I know this is boring to most readers but it kept us hoping during the month of August!
We did briefly break away from the travel and tours for a recent stopover at The Family Office Club’s Private Investor Deal Flow Forum in San Francisco. Our CEO, Rick Courtney shared his thoughts on how to drive growth with private equity and venture capital. Rick shared some of his ideas regarding the innovative deal structures and where he feels some of the best opportunities reside.
Exclusive Invitation to Next Week’s FORE Conference
Last chance to get complimentary access to the upcoming Family Office Real Estate Institute Conference, taking place this week from September 14-16 at the University of Denver!
This event is exclusively limited to 60 Family Offices, providing a unique platform to connect with distinguished industry experts and fellow Family Offices.
Essential's Rick Courtney will be speaking at a panel discussion on "Understanding Real Estate Pricing: Strategies, Trends, and Market Insights". Renowned Family Offices and other experts from the real estate industry will also deliver valuable knowledge and their perspective on generating alpha in this unique investment environment.
Reserve your spot today by referring to Essential Realty Partners.
