A Texas real estate investment trust (REIT) is taking advantage of banks’ need to shed properties this year by making some major investments in REO multifamily properties[1]. REITs First Capital Funding and Principals Capital Funding are currently involved in $39 million worth of transactions that they believe “signal recovery in the debt and equity markets.” J.P. Newman, who is the founder of both firms, believes that multifamily housing is perfectly balanced for investing in today’s economy. “If the economy improves, the asset values improve,” he explained, adding that “if the economy goes down, then we’re well positioned by owning assets that provide housing at a reasonable price point.”
Texas is not the only place where multifamily housing is currently perceived as a win-win investment. In a recent Las Vegas auction, more than $1 billion in multifamily properties were sold with investors being “pretty aggressive…with multifamily being the most sought-after,” as a Colliers International broker described it[2]. Fannie Mae is also moving in on the market as some analysts fear that “affordable housing” in the multifamily housing sector could be threatened when rents rise[3]. The government-controlled GSE reports that “market conditions dictate that [the number of multifamily rental units in the U.S.] will not meet the growing demand” in the near future.
How do you feel about multifamily housing? Is now the time to get involved, or is this the beginning of a new bubble?
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[1] http://www.housingwire.com/2011/05/23/texas-reit-acquiring-redeveloping-foreclosed-multifamily-properties
[2] http://www.lvrj.com/business/multifamily-housing-lures-buyers-122295649.html?ref=649
[3] http://www.reit.com/Articles/Fannie-Mae-Focuses-Multifamily-Efforts-on-Affordable-Housing-Market.aspx
