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 Street Capital.

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 year.

“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.”