Sunbelt Multifamily Investments Shine in 2024

In the ever-changing landscape of investment, multifamily assets stand out for their resilience. As economic turbulence persists in 2024, investors turn to trusted partners like Viking Capital to steer them through uncertain waters. Despite the Federal Reserve’s delay in interest rate relief, institutional investors remain cautious, creating a unique advantage for Viking and its investors to capitalize on stronger purchasing power amid reduced competition. Viking Capital’s strategic focus on the Sunbelt region has proven successful despite the volatility of 2023 and 2024.

This dynamic sector has defied expectations, driven by a surge in domestic migrations into these 15 southern states. This article explains why Viking is so bullish on the Sunbelt in 2024.?

Sunbelt Migration Trends

The history of Sunbelt migration begins with a remarkable surge in population starting in the 1950s. After World War II, a notable demographic shift unfolded across the United States, with populations gravitating away from older northern cities and towards the burgeoning Sunbelt region. This influx was driven by newfound economic opportunities linked to military installations and rapid growth in the region’s industrial, agricultural, and commercial sectors.

Fast forward to the onset of COVID-19, and again the U.S. saw a large shift of domestic migration away from the northern states and into the Sunbelt. As many Americans faced unemployment and layoffs, many sought after a lower cost of living and a less populated housing environment. After the pandemic, Sunbelt migration has continued due to various reasons.? These factors include; abundant job opportunities, a lower cost of living, and the appeal of favorable weather conditions.?

Sun Belt Population Growth

According to the Census Bureau, the Sun Belt emerged as the undeniable frontrunner for population growth in 2022. Among these thriving locations, Texas stands out prominently, with four cities placing in the top 10: Dallas-Fort Worth took the top position, followed closely by Houston. Austin and San Antonio also made notable appearances at sixth and ninth place, respectively.

Another Sunbelt state, Florida, also solidified its presence on the list, with Orlando, Tampa, and Jacksonville securing spots at fifth, seventh, and tenth places. Adding to this impressive lineup are Atlanta, Georgia, at third place, Phoenix, Arizona, at fourth, and Charlotte, North Carolina, at eighth—each representing vibrant hubs of growth and opportunity.

Remarkably, these metropolitan areas have consistently ranked among America’s fastest-growing cities from 2010 to 2020. A study conducted by the George W. Bush Institute-SMU? Economic Growth Initiative reaffirms their rankings, highlighting their opportunity and economic mobility within the United States. This collective achievement reflects the undeniable allure of the Sun Belt, strengthening the appeal for investors as the Sun Belt shines as a hub of economic vitality as these cities continue to grow.?

Multifamily Investors Favor the Sunbelt?

Multifamily investors are turning their sights toward the Sun Belt region. Faced with market volatility and escalating debt costs, investors are drawn to areas offering robust population growth, abundant job opportunities, and reduced political risk.

The allure of the Sun Belt is amplified by the contrast with markets like California, where stringent rent control measures have tilted the scales against landlords. As investors seek environments with favorable landlord rights, states within the Sun Belt emerge as compelling alternatives, offering a conducive climate for multifamily investment growth.

This strategic shift underscores the importance of aligning investment decisions with broader economic trends and regulatory landscapes.

Viking’s Strategic Approach to Sunbelt Multifamily Investments

As the year progresses, Viking Capital remains dedicated to maximizing the potential of the multifamily market in the Sunbelt. This provides investors with the opportunity to secure strong returns despite the uncertain economic conditions. As billions of dollars in loan maturities are approaching in the Sun Belt region, lucrative deals are emerging for investors.

Viking is actively developing strategies to capitalize on these opportunities amid this market uncertainty. Our strong connections with brokers and solid industry reputation enable us to access off-market deals, giving us a competitive advantage and securing properties at a low purchase price. Furthermore, our acquisition team’s thorough underwriting process helps us identify the most promising investment prospects for our investors.

With many of the institutional-size investors lying in wait, our team is diligently prospecting hundreds of deals a month to leverage the reduced competition and overall purchasing power we have created.?

Key Takeaways:

The cyclical nature of markets echoes through time, presenting both challenges and opportunities. As Viking Capital navigates these fluctuations, our focus remains unwavering: empowering investors to build long-term generational wealth through strategic investments.

Time and again, the Sun Belt has proven itself as a bastion of strength and resilience amidst market uncertainties. Its consistent outperformance is a testament to the enduring appeal of this region, fueled by factors such as domestic migration and ongoing technological advancements.

With each investment decision, we reaffirm our belief in the Sun Belt’s potential to weather market volatility and sustainable growth. By harnessing its opportunities, we pave the way for our investors to thrive in an ever-evolving landscape.