Handling Deal Volume, Rent Increases In Multifamily
How far we’ve come from the days following the market meltdown. For many working multifamily deals, in the post-recession era the conversation has shifted from talking about short sales to talking about how to get credit to now talking about how to handle deal flow.
So deal flow is back. It’s a “target-rich” environment out there. But how best to handle deal flow in multifamily? Elliot Throne, Managing Director of national firm HFF talked to Globe Street’s Jennifer LeClaire about exactly that.
GlobeSt.com: How do you get creative to make the deal work for all parties?
Throne: Easy. Provide clear and concise information to all parties. The buyer needs to know they have looked at every angle and will not be faced with any surprises. They also need to see a real vision as to how they can successfully enhance value within the asset.
Lenders need to know they are also getting all important insight so they can quickly determine how aggressive they can be to win the deal. Everyone is chasing so many deals right now that it’s important to make sure prospective parties can effectively capture this business—if they are willing to get aggressive—without being concerned about missing out on other potential deals on their plate. With aggressive pricing comes a very slim margin of error and nobody can afford to have deals fall out and drag on longer than necessary.
In a previous interview, Throne had more to say about the specifics of multifamily in South Florida:
GlobeSt.com: What challenges do you see for multifamily in the [South Florida] local market?
Throne: We are seeing additional projects being delivered but it’s still at a pace that can easily be absorbed. Older assets are being renovated up to a higher quality and owners are successfully being able to raise their rents to bridge the wide gap between what new developments are charging. The main concern, not just locally but nationally, is how high we can keep pushing rents before serious resistance kick in. There is no question that there is additional room … it’s just how much?
Aggressive pricing, aggressive rent, worrying about missing out on the right deal instead of clutching desperately to a a single deal – it’s a very different multifamily marketplace than we had in 2008.