*NEW* A virtual quarterly series offering real insight and information into the hottest topics of commercial real estate
Multifamily Housing Recap
On April 6th, 2021, CBC Chatter launched as a virtual series focused on discussing the hottest and most relevant industry topics and trends.
The first virtual event of its kind featured Daniel Spiegel, Managing Director, and Daniel McGue Coldwell Banker Commercial’s top multifamily producer in San Francisco, to discuss the tremendous uptick and interest in the multifamily sector. McGue’s experience within multifamily is extensive, as he has sold over 14,000 units totaling approximately 10.7 million square feet, with a sales volume exceeding $2.7 billion.
During the conversation, Spiegel and McGue addressed the multifamily market as it stood pre-pandemic and what is happening currently. No stone was left unturned as the conversation veered from rent prices and transactions, tenant trends, and investor insights, including:
- Buying & Selling
- In early 2020, there was a very strong economy and market for multifamily. Buildings were selling readily, and then when the pandemic began, there was a halt. Owners were avoiding taking unnecessary hits and hoping that the market would correct itself, however, as time went on, business had to continue.
- Although cashflow was very low at this time, buyers were slowly coming back into the market with a positive outlook, approaching an investment as a once in a lifetime opportunity, and sellers came around to meeting the market where it was at the time.
- There was an influx of regional investors who knew their markets well and wanted to capitalize on the favorable prices.
- Rental Market
- Tenants were leaving the larger metro areas and opting for additional space for WFH environments, but those who stayed within the metro areas were opting for larger apartments with workspaces, outdoor space, or bike storage, given all the time spent at home.
- Tenants were also investing in favorable neighborhoods instead of opting for the luxury high rise with flashier amenities.
- There was certainly an influx of tenants who previously could not afford to live in San Francisco (or other expensive metro areas) and were able to obtain cheaper rents with concessions due to the outmigration of those areas.
- For example, New York City, Newark, Chicago all saw a big outmigration ranging from 69% to 72%, while lower density cities saw the most in-migration such as Wilmington, NC (79%) or Boise, ID (75%)
- In San Francisco specifically, landlords were worried about rents being paid on time in the early months of the pandemic, however as time went on, 90% of rents were being paid on time. If they were not, there were ways to recover that rent.