Inner SPARK April 2024
Spark Multifamily Investment Group
I help you achieve financial freedom and create the life of your dreams through passive real estate investments.
Hi Everyone,
It’s been a busy month at Spark Investment Group!
Dan Rowley and I attended the Best Ever Conference in Salt Lake City April 9 through 12. I always look forward to going to this conference with so many excellent speakers and networking opportunities. It takes place right in downtown Salt Lake City so plenty of fun places to walk to. And even though the weather was in the high 60s or low 70s, one can still see snow on the mountain tops that surround Salt Lake City.
I love the look and feel of high desert country though I can say, upon my return to Greenville, I really enjoyed the lush vibrant greenery all around me. It’s a beautiful time of year here.
Laura’s roses have gone absolutely crazy in our back yard and so we have fresh flowers every day.
Oops maybe I should return to filling you in on the actual Best Ever Conference. :-)
Dan and I were able to meet with several of our Spark investors and a few of our coGP sponsors while in Salt Lake City. It's wonderful to meet our investor partners face to face and learn more about them and their personal story.
As you can well imagine, sentiment was mixed as to whether this is the best of times or the worst of times to be a real estate investor.
If I was to give a brief synopsis of the overall sentiment, I would say:
Short term turbulence to remain for now. Long term prospects for multifamily are bright.
After a weekend of rest, Spark Investment Group launched the capital raise for our latest opportunity Townes @ Wofford Pine. Investor webinars were held Tuesday and Wednesday night. We are busy finalizing all the legal documents to comply with SEC regulations. After the success of the Greenville New Build Portfolio 1 offering, we expect this current offering to go well.
On the capital markets front, the Fed continues to hold rates steady and the buss words at BEC were; “Higher (interest rates) for longer’. I’ve given uo trying to predict what the Fed will do and when. Instead I choose to focus on what I can control - continue to seek good investment opportunities and operate our current assets professionally.
THE LATEST NEWS FROM SPARK
Be sure to check out the first two articles below:
Globest.com believes Greenville SC will experience the 3rd highest increase in rental rates over 2024 across the US - 3.9%.
With both Townes @ Wofford Pine and Townes @ Silos available for investment now, this would be a great time to let us know if any of your family, friends, or associates might benefit from the real estate opportunities Spark Investment Group provides.
Despite a difficult 2023 and a somewhat sluggish start to 2024, all Spark assets are doing well and paying investor distributions as promised.
We expect the market to upturn no later than 2025 and acquiring high quality assets in a solid growth market like Greenville, SC in 2024 sets our investors up for promising long term acquisitions.
This Month’s Newsletter
Once again, we’re delighted to offer educational content about multifamily investing to you through Inner Spark. Much of this content deals with the ever evolving multifamily market. After several boom years, we are entering a new phase of the economic cycle.
In this edition, you’ll find:
领英推荐
Top 10 Emerging Multifamily Markets in 2024
The top 10 emerging multifamily markets in 2024, based on Yardi Matrix data, offer a diverse range of opportunities from coast to coast. Greenville, South Carolina, stood out as the second-ranked market on the list. Greenville boasts a 94.0 percent occupancy rate as of November. The metro's employment market reported a 2.9 percent unemployment rate, outperforming the U.S. rate by 80 basis points. Additionally, Greenville experienced a significant 22.3 percent year-over-year increase in the average per-unit price, reaching $195,802, just above the national figure. This growth attracted $655 million in multifamily investment in 2023, which is the second-largest volume among metros in this ranking.
Click the link to read the whole article.
Tertiary Apartment Markets Set to Outperform Coastal Markets
Tertiary markets are poised for significant rent growth over the next five years, outperforming coastal markets, according to a new report from Markerr. Greenville, South Carolina, stands out as one of the top-rated markets, with a projected 3.9% rent growth.
Click the link to read the whole article.
Build-to-Rent Housing Volumes Hit All-Time High
The build-to-rent sector in the U.S. witnessed unprecedented growth in 2023, with a record-breaking 27.5K rental homes completed nationwide, marking a 75% uptick from 2022 and nearly 300% more than in 2021.
The top states for build-to-rent were Texas, Arizona, Florida, Georgia, and South Carolina.
The allure of bigger living spaces, including private backyards, has intensified post-pandemic, driving an average annual increase of 6.6K BTR (build-to-rent) units pre-pandemic to tens of thousands annually since 2021. Although construction activity has surged in recent years, forecasts indicate a likely moderation in the pace of new developments in the future, considering mortgage rates and housing prices remain near all-time highs.
Click the link to read the whole article.
Prime Multifamily Metrics Tick Upward for First Time in Two Years
The recent report by CBRE, as highlighted on ConnectCRE, underscores a notable shift in the multifamily real estate market for the first time in two years. Key metrics, including going-in cap rates, exit cap rates, and unlevered IRR targets for prime multifamily assets, have seen slight improvements in the first quarter. This positive change comes after a period of decline that lasted for eight consecutive quarters, coinciding with the Federal Reserve's interest rate hikes starting early 2022.
Matt Vance, the head of multifamily research for the Americas at CBRE, interprets these developments as a potential turning point in the market. With the stabilized positive spread and the adjustments in cap rates and IRR targets showing positive trends, it suggests that key underwriting metrics might have peaked, anticipating possible future rate cuts. Investors are advised to closely monitor these developments as they could signal changing dynamics in the multifamily market.
Recession vs. Resilience: BEC '24 Recap
The Best Ever Conference 2024 provided an insightful exploration of the economic landscape and its potential impact on the commercial real estate (CRE) sector, with a diverse range of opinions from experts. David Rosenberg of Rosenberg Research predicted an upcoming recession, attributing this outlook to the lagged effects of interest rate increases, the waning influence of pandemic-era fiscal stimulus, and emerging economic imbalances. He suggested a cautious investment approach, favoring assets like bonds, dividend-paying stocks, utilities, REITs, and the energy sector. On the other hand, John Chang from Marcus & Millichap presented a more optimistic view, believing in the market's resilience. Chang outlined five trends poised to influence CRE over the next five years, including advancements in AI/technology, demographic shifts, evolving housing affordability, public policy changes, and adjustments in globalization and supply chains. He emphasized the transformational effect of digital innovation on real estate, driven by e-commerce and remote work trends, as well as the significant demographic influence of millennials on housing demand.
Click the link to read the whole report.
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