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2018 NMHC Recap & Reflections for the Multifamily Industry

NMHC-2018.pngFlying back home from the NMHC Annual Meeting in Orlando, I can’t help but reflect on how fortunate we all are to be in this particular industry, at this particular moment in time. After several years of record 4-5+% rent growth, the past 16 months have seen remarkably stable rent growth with Axiometrics reporting YOY growth in the very narrow range of 2.1% to 2.5% (the long-term historical average is roughly 2.2-2.3%). It’s not often we get to experience a sustained period of “Goldilocks” growth (“not too high, not too low”). Not surprisingly, the single biggest theme I observed at the session was a general satisfaction and confidence in the industry. The tone was clearly optimistic, but not heady. I realized that many of the CEOs and COOs attending were in the same or similar positions with their companies back in 2006-07. So while everyone feels good, the lingering memory of how that bull run came to a crashing end tempers any irrational enthusiasm. Despite the stability of current market conditions, we are clearly in a transitional period not just in our industry, but in the larger business world as well. Here are a few key observations from my vantage point: We all know there are big technological changes afoot, especially in the area of managing data and the burgeoning space of “artificial intelligence,” but everyone is struggling to figure out what is really relevant to us, and maybe more importantly, when. I personally think that the first area of substantial AI use will be in call......
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NMHC, S2S Launch 40 for 40 Campaign to Fight Homelessness

  2018 marks the 40th anniversary of the National Multifamily Housing Council (NMHC). At Shelters to Shutters (S2S), we could not be more excited about how the vitally important organization is celebrating this notable milestone.NMHC is partnering with S2S, its designated 2017-2018 charity, to conduct the 40 for 40 campaign to help the fight to end homelessness. The goal of the campaign is to sign up at least 40 new multifamily partners who will make a financial contribution to support the mission of S2S. The campaign is seeking to raise $200,000.S2S transitions individuals and families from homelessness to economic self-sufficiency by partnering with apartment operators to provide full-time employment and housing opportunities.The 40 for 40 campaign begins this Thursday morning, Jan. 18, with the NMHC Walk for the Homeless Benefiting Shelters to Shutters during the 2018 NMHC Annual Meeting. The campaign will then run for 40 consecutive business days following the Annual Meeting.A minimum $5,000 contribution is needed to be recognized as a 40 for 40 Partner. The benefits of being a partner include: •    Recognition on both the NMHC and S2S websites.•    Promoted via S2S social media channels.•    Mention in a press release.•    Acknowledgement in the S2S annual report.•    Recognition in a special, dedicated email to NMHC members recognizing 40 for 40 Partners.•    Inclusion in scrolling PowerPoint presentations displayed before the start of each general session at upcoming 2018 NMHC meetings, beginning with the NMHC Spring Board of Directors Meeting in May 2018.For more information on the 40 for 40 campaign an......
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NMHC and Lessons in Leadership

NMHC and Lessons in Leadership
Anyone who knows me knows that I am fairly passionate about the topic of leadership. To put a finer point on it, I'm passionate about GREAT leadership; the type of leadership that inspires both internally and externally, and makes people, companies and industries better.   The National Multifamily Housing Council"s recent annual meeting had a great deal to offer in terms of leadership. Not only were many of the industry's movers and shakers in attendance and participating on panels, but this year's CEO panel as well as keynote speaker and former Secretary of State Condoleezza Rice were particularly impressive.    NMHC always does a great job of pulling together intriguing personalities from leading companies for the CEO Panel, and this meeting was no exception with representation from Waterton, Greystar, Kettler, Marcus & Millichap and Steadfast.  While perspectives on various discussion topics may have differed slightly from company to company, one thing was a constant: all acknowledged that successful leaders and vision aren't the product of one individual, but of strong and diverse teams. Music to my ears.   And then, of course, is the impressive Dr. Condoleezza Rice.  Her credentials are far too extensive to enumerate here, but allow me to list a few:  aside from being the 66th Secretary of State of the United States (the second woman and the first African American to hold the post), she has earned three degrees, holds 11 honorary doctorates, has authored numerous books and served on many boards including three currently. And let's......
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Musings on diversity and inclusion in multifamily - you, too, suppliers!

Musings on diversity and inclusion in multifamily - you, too, suppliers!
No, no - this isn't a political post! Although timely, there's certainly enough conversation going on about that on other forums. My musings flow from having attended last week's National Multifamily Housing Council's (NMHC) annual meeting in San Diego. Among the many enlightening sessions, one that really resonated with me was the panel titled "An Imperative for Future Business Success: Walking the Talk on Diversity & Inclusion." Really strong panel, and really great content. An oft-quoted source during the discussion was a McKinsey Women in the Workplace 2016 study, you can view an excerpt from the report here. There was nothing tremendously surprising, of course -- we still have a long way to go as a nation and as an industry to create true diversity and inclusion (and earning parity) for not just women, but all ethnicities, races and orientations. It was extremely encouraging, however, to see that not only did NMHC have a general session devoted to the topic, but that they have a Diversity and Inclusion committee. This high-powered organization and many of its extremely visible members are activity embracing this challenge and creating business strategies (and in some cases departments) devoted to expanding the cultural vision, values and hiring practices around including diversity of thought and individual in the workplace. Refreshing. Necessary. Smart. Right. But as someone who hails from the supplier side of the business, it really got me thinking. Indulge me while I wax anecdotal here . . . but while we seem to have a large......
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Heading to NMHC's 2017 Annual Meeting in a post-inaugural world

A week from today, I'll be boarding a jet with my good friends at Delta as I journey to San Diego for the 2017 annual meeting of the National Multifamily Housing Council (NMHC), along with the preceding Apartment Strategies Outlook Conference.   As I was checking the agenda against my calendar to figure out the best windows for a few conference calls, it hit me that this will be the first NMHC conference in some time with a new U.S. administration in place. A brand-spanking-new and really different administration. No matter what your political leanings, or how you feel about our incoming and outgoing Presidents, it's safe to say we can all acknowledge this will have an impact on our industry. We just don't yet know what that impact will be.   And all the more reason I'm anxious to attend this year's meetings. What will our industry leaders and data experts project?  Who will feel bullish and who will be more conservative? And speakers like former secretary of state Condoleeza Rice and former presidential candidate and Massachusetts governor Mitt Romney are sure to be queried for their opinions of the newly-inaugurated President and his cabinet choices (think HUD secretary, for example). I'm personally looking forward to Emmy-winning comedian Dana Carvey and award-winning political journalist Jeff Greenfield to add some levity and political scrutiny to the mix.   So, it promises to be a very interesting few days, to say the least. If you're also attending, I hope to see you......
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Could Crowdfunding Be Horrible For Multifamily Operations?

NMHC shared an article discussing the rise in crowdfunding, and how that funding focuses on individuals rather than institutional investors.  In some ways, this is a huge opportunity for the industry, and especially for smaller entities who don't need large established connections to institutional capital in order to fund their deals.  However, one quote really stuck out to me: “We definitely are surprised by what the crowd wants,” he said. “We started with [conservative] deals where investors weren’t going to lose money. But the investors often want high risk—and I’m more middle of the road.” As a higher tolerance for risk has emerged so has the expectation on the timing of returns. “They also want short term,” Miller said. “They'd rather take a nine-month deal rather than a nine-year year deal. The online investor has an Internet mentality. If they could give you the money and get it back next week, they would.”  (Emphasis added) The multifamily industry is separated into two primary elements - gains from asset appreciation and profit from operations.  Obviously, the two are related, as profit can drive asset value, but they are also quite separate, as a gain in asset value can be purely from market dynamics.  Additionally, increases in transactions for a property can negatively impact operations, as new owners implement their own processes, employees, etc creating instability at the property.  And in this way, an influx of very cheap money could create "pump and dump" situations within the multifamily industry, where investors look to churn through propert......
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NMHC Seeks Technology Startups for Launch Pad Competition

The National Multifamily Housing Council (NMHC) has opened nominations for its annual Launch Pad competition which recognizes startup technology companies targeting the apartment industry. Technology firms that have been in business five years or less are eligible to enter by submitting a 500-word summary of their innovative product or service by the October 23 deadline.  “Now in its third year, the NMHC Launch Pad is a highlight of the Council’s OpTech Conference & Exposition,” said Julie Stalknecht, NMHC’s Senior Vice President of Membership, Meetings and Marketing. “The last session of the conference features four finalists pitching their company to a panel of industry judges, and the winner receives the 2014 Technology Innovation Award, a $5,000 cash prize and a complimentary one-year membership to NMHC.”  “Launch Pad is an important element of NMHC’s broader industry technology program,” said Rick Haughey, NMHC Vice President of Industry Technology Initiatives. “Technology has become an integral element of virtually every aspect of apartment operations. With leadership from the industry’s top technology practitioners, NMHC plays an important role in helping create the ecosystem that supports continued innovation in our sector.”  Firms interested in competing in Launch Pad can learn more at http://ow.ly/ChCpo.    The 2014 NMHC Technology Innovation Award will be presented at the NMHC OpTech Conference & Exposition being held November 17-19, 2014 at the Hilton Bonnet Creek in Orlando, FL. More than 1,000 senior executives will gather at the conference, which features 40+ educational sessions and peer-to-peer roundtables in five tracks: marketing, technology, telecommunications, sustainability and industry trends. In additio......
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The Biggest Multifamily Companies In The United States

The Biggest Multifamily Companies In The United States
Have you ever wondered who owns all of those massive, thirty-story apartment complexes?  Well, a lot of those buildings are actually owned by the same companies.  If you combined the top 10 multifamily owners in the United States, you would have over 1.2 million units!  Here are the top 10 multifamily holders: 10. Coming in at number 10 we have AvalonBay Communities, Inc. making the top ten this year, unlike like last year where they fell short and came in 12th place last year. AvalonBay owns 72,814 units up a whopping 21% from the 60,101 units they owned last year.        9. Leaping up the list from last year’s number 18 comes MAA in 9th place. Currently owning 81,851 units this year, which is uproar compared to the 49,591 units they own last year.                        8.  8th place goes to the Enterprise Community Asset Management, Inc., which came in 9th place last year. Raking in an increase of 1% from last year to 99,984 units, almost the same amount of units as last year’s 99,013 units. Enterprise moto emphasizes on going green for building and preserving green affordable housing  7.  Coming at number 7 we have The Richman Group Affordable Housing Corporation. Coming from number 8 last year with 104,572 units, the company went up one spot, but with fewer units than last year with only 102,098 units. 6. Equity Residential takes 6th place, up from last years’ 7th place......
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Deals Drive Shake-Up in 2014 National Multifamily Housing Council List of Nation’s Top 50 Owners, Managers

A rebounding apartment industry with near record transaction levels created notable changes in the National Multifamily Housing Council’s (NMHC) newly-released 2014 NMHC 50 – the industry’s ranking of the top owners and managers.  Hunt Companies/LEDIC Managed Group Affiliates (253,295 units owned) jumped to the top spot in the owners list while Greystar Real Estate Partners, LLC (214,696 units managed) topped the NMHC 50 management list for the fourth consecutive year. Full rankings and detailed analysis is available at www.nmhc.org/NMHC50. “While rental demand continues to rise, new apartment supply still came up short. Multifamily completions came in at 185,800 in 2012 still well below the 300,000 per-year pre-bust average,” said NMHC Senior Vice President of Research and Chief Economist Mark Obrinsky. “Annual absorptions of investment-grade apartments rose by almost a third in 2013, but ultimately remained constrained by new supply. Providing further indication of continued strong demand, occupancy rates were unchanged at just over 95 percent.” “Top apartment executives looked to best position their companies to take advantage of the market recovery and larger portfolio deals and acquisitions marked the year. This level of trading resulted in more than the usual degree of shake-up in the apartment industry last year,” said Obrinsky.   NMHC 50 highlights, by the numbers: $104.7 billion – 2013 transaction levels, just 1.4 percent less than the all-time high in 2007 and $17 billion more than 2012. 110,198 – Number of units Hunt Companies added in 2013, mostly from the acquisition of last year’s number three NMHC 50 owner Centerline Capital Grou......
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Senate Testimony Highlights Need for a Separate Multifamily Solution

Lawmakers considering the future of the nation’s housing finance system must understand that a “one-size-fits-all” approach will not work. The meaningful differences between the single-family and multifamily sectors, both in how they operate and how they have performed, require different solutions to avoid putting the 35 million Americans who rely on the apartment industry for their housing and the $862 billion multifamily debt market at risk. That was the core message from National Multi Housing Council (NMHC) and National Apartment Association (NAA) in today’s testimony before the Senate Committee on Banking, Housing and Urban Affairs. “The multifamily financing process, mortgage instruments, legal framework, loan terms and requirements, origination, secondary market investors, underlying assets, business expertise and systems are all separate and unique from single-family home mortgage activities,” said Tom Bozzuto, Chairman and CEO of the Bozzuto Group, representing NMHC and NAA. “Not only are the sectors very different in how they operate, they also have much different performance records,” said Bozzuto. “The delinquency and default rates of Fannie Mae and Freddie Mac’s multifamily programs are less than one percent, a tenth of the size of the rates plaguing their single-family programs. It comes as a surprise to many that their multifamily programs have generated over $13.6 billion in net profits for the federal government since they were put into conservatorship.” “We strongly urge policymakers to retain the successful elements of the government-sponsored enterprises’ (GSEs’) multifamily programs in whatever replaces them,” said Bozzuto. “It is also critical that a reformed housing finance system retain a federal backsto......
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