5 Takeaways from the 2020 NMHC Apartment Strategies Outlook Conference in Orlando, Florida

I attended the January 2020 NMHC Conference in Orlando this past Monday and Tuesday. An astounding 6,000+ multifamily professionals attended. It was wall to wall with primarily developers, investors, brokers, and lenders starving for the next deal. I met with 29 different investors in 30 minute increments in a speed dating fashion. Here are my 5 takeaways in no particular order:

1. I will tell you that 29 of the 29 investors I met with all had one common theme voiced to me, "Beau, what do you have that we can look at?" Investors still have unlimited amounts of capital to deploy and they all agreed it is getting harder each day to find assets to buy.
2. Lenders were equally extremely interested to lend money and the good lenders are out searching for deals as hard as investors so that they can source them for their investor customers. Lenders want to underwrite the deal for brokers before even going to market, which is smart, so that a) investors can see how the deal looks post expenses and debt, and b) so that if the investor likes what they see, perhaps the investor will reach out to the lender. Also, Mark Gibson of JLL pointed out that as a whole the debt that has already been put out has a good risk profile, unlike that of the financial crises days 10+ years ago.
3. The entire crowd was still quite upbeat about the industry as a whole. Every metric that drives multifamily still points to a strong rentership in to the future, including job growth, wage growth, unaffordable home prices, and the preference of under 40 year-olds to be nimble for their occupation.
4. While it is true in my central and north Florida markets that the number of apartment sales was down 30% from 2018, sale prices/unit increased between 15-19% depending on the market. Orlando was even more. Most of the reason the number of sales is down is because roughly 35% of the inventory has already sold in the trailing 3 years. You can't expect that pace to continue forever. A lack of supply drives up values.
5. Student housing that is not extremely well located, within walking distance to a major university, has many lenders taking a more precautionary stance on those assets. In many college towns during a boom like we've experienced, thousands of beds have been built with more on the way. Lenders are taking note of that in their underwriting.

That's my Top 5 list. As always, you can find awesome information on the Florida markets I cover at www.beaubeery.com, click on "resources" at the top, and select the Florida market you'd like info on. My cell is 352-871-8324 and my email is [email protected].