💡 Summary: The current market conditions, marked by rising interest rates and disruptions in capital markets, are creating significant opportunities to acquire commercial real estate at favorable prices. Multifamily properties remain a resilient investment class, offering a hedge against inflation. Partnering with experienced sponsors and selecting the right investment structure, such as closed-end funds, can … Read more
💡 Summary: Economist Peter Linneman predicts that capital markets for multifamily investing will recover in the second half of 2023 as banks resume lending and investor confidence returns. He expects cap rates to decline as capital flows back, while limited new construction and strong housing demand support steady NOI growth. Despite recent rate hikes, Linneman … Read more
💡 Summary: Kathy Fettke believes the next 6–12 months of the economy will largely depend on Federal Reserve actions, which remain unpredictable. While high interest rates have slowed housing, she sees strong long-term demand driven by millennial household formation and limited housing supply. For multifamily investing, Fettke views current uncertainty as an opportunity to find … Read more
💡 Summary: Rising rates and recession risk mean investors should expect lower projected returns and longer holds in multifamily investing—think low-to-mid-teens IRR for Class B & C value-add deals. Prudent operators are de-risking with higher exit cap rates, modest rent growth, lower leverage, fixed agency debt, and larger reserves. Be wary of sponsors touting outsized … Read more
💡 Summary: Gary Lipsky, CEO of Break of Day Capital, outlines five key strategies for successful real estate investing in 2023: be conservative with underwriting, understand your local market, manage debt wisely, invest in workforce housing, and partner with experienced professionals. By focusing on risk management, informed decision-making, and long-term stability, investors can navigate a … Read more
