Multihousing Investors Plan to Expand Portfolios
Forty-six percent of multihousing
investors plan to grow their portfolios in 2014, while just 18 percent plan to
reduce holdings this year, according to a recent Beech Street Capital survey.
Of those surveyed, 52 percent
expect acquisition financing to be most critical to their business through
year-end, while 34 percent expressed concerns about the impact rising interest
rates may have on their prospects for growth. Other concerns respondents cited
include overbuilding of apartment units (24 percent), the pace of
capitalization rate expansion (11 percent), access to financing (10 percent),
and global uncertainty (10 percent).
“Our survey found that multihousing
acquisitions are clearly on the rise, driving an increase in demand for
acquisition financing,” said Rick Lyon, head of commercial real estate banking
at Capital One Bank, which owns Beech
More than half of respondents
“expect urban properties to increase in value, with only half as many seeing
increases for suburban properties,” according to the survey. A good share of
respondents -- 42 percent –- expects multifamily renovations to pick up this
“Many owners are choosing to
renovate and modernize their properties to remain competitive and maintain
customer satisfaction,” said Grace Huebscher, Beech Street Capital’s president.
“At the same time, savvy developers are looking to new markets for
opportunities, contributing to a positive outlook for the industry.”