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Why Single-Family Markets Matter to Multifamily

Why Single-Family Markets Matter to Multifamily
The multifamily and single-family rental industries have their share of differences, from disparity in scale to NOI growth and market presence. But some considerable overlap exists between the two asset classes in terms of investment opportunities.  An increasing number of multifamily owners and operators are looking to expand in build-to-rent single-family housing because the single-family asset class is on track to outperform other real estate sectors over the next decade. Suburban Sun Belt markets, specifically, present the most overlap -- and competition -- between multifamily and single family. While operations and expenses vary between the two asset classes, drivers of demand and rent growth are very similar:  Similar rent growth driversData from Markerr found the key rent growth indicators for both asset classes are job, income and population growth. Considering multifamily and single family share the same rent drivers and demand indicators, leveraging alternative, granular data with real-time updates is immensely valuable to both asset classes as the investment space gets more competitive. Looking at unique, granular data can identify attractive opportunities at the market and submarket levels that may not be apparent to investors, owners and operators relying on traditional data.  Overlap in resident profiles Suburban Sun Belt markets have been outperforming all other markets in terms of revenue growth, and single-family rentals in these markets pose the biggest competition to multifamily communities, according to a single-family investment report from Markerr. A recent report on single-family markets note that exurban and suburban areas have massively outperformed all other geographic densities since......
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Why Nontraditional Data Points are More Effective

Why Nontraditional Data Points are More Effective
Commercial real estate investors and asset managers have been leveraging the same data sources for decades. With continued cap rate compression across markets and asset quality grades, there needs to be a way to win deals that will outperform in a highly competitive industry. Savvy investors have been getting ahead of the curve by leveraging granular, nontraditional data for a much more effective method of analyzing markets and rent growth potential. Utilizing these nontraditional metrics in commercial real estate allows investors to explore new opportunities in submarkets that have been overlooked and make confident, data-driven decisions.  Robust insights in a centralized location provide crucial, real-time information on market trends while allowing acquisitions and research teams to spend more time on tactical strategies and decision making. This is highly valuable for multifamily investors, owners and operators not only for the competitive advantage, but also because it streamlines the underwriting process and research efforts in different markets.  Here are some of the ways nontraditional data points are more effective: Hyper-localized insight Real estate is a hyper-localized industry and any insight on a granular level is not only more accurate, but also more predictive. Real-time metrics on employment, income and population growth when viewed on the zip code -- or even block-level group -- are much more telling than traditional data, which may only exist at the MSA level. Census data is a good jumping off point for analyzing real estate investment opportunities, but it lacks the granularity and recency critical for research and planning. ......
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Florida + Multifamily = A Lot of Happy Investors

Florida + Multifamily = A Lot of Happy Investors
With all the activity taking place across the country, multifamily real estate investors are beginning to seek out their next strategic move and it looks like the opportunities in Florida are garnering a ton of fresh attention. According to the American Action Forum, the housing markets in Florida have seen statewide price increases while experts over at Colliers report multifamily vacancies are down to 5.8% with 2,500 units currently being constructed. Some of the biggest draws in multifamily for investors entering the Florida market include some of the country’s highest job growth rates and signs of a strong demographic push by both the younger and older populations. During the recession, employment opportunities dried up alongside many Americans’ retirement savings. These factors have led to an abandonment of the dream of ownership for the simplicity and value-added idea that is renting. In markets like Orlando, the fact that 25,000 new jobs have been added in the last year to lead to a decrease in unemployment, is attracting these workers into the bigger cities from the smaller surrounding areas. Following the same post-recession trend we’re seeing take place across the country, the Millennials and Baby Boomers are choosing to rent and are now doing so at a higher rate than the national average. The key to investors succeeding in this new market trend seems to lie in the quality of the products being produced, the interpreted level of customer service received, and the perception that these would-be tenants are getting more bang-for-their-buck. These elements are becoming increasingly important to fo......
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