As the apartment market continued to sizzle midway through the decade, few anticipated that investors would remain just as bullish on the multifamily sector as the decade reached its tail end. Yet as the calendar flips to 2020, many investors remain active and hungry and are prepping to raise funds for the next year.
That’s not to say potential changes aren’t in the works as the industry might soon experience a significant shift in the owner-operator model with regard to pricing and equity. Operators that have a large footprint in various markets—and can leverage a reputation for being able to source off-market deals and manage more difficult transactions—will still have their fair share of investors.
They’ll have to be nimble, however, because while equity will continue to be available, it will become more difficult to attain. The low-interest rate environment is fostering competition for acquisitions, which is creating some unique investment scenarios, such as sub-five cap rates in secondary and even some tertiary markets where demand is still outpacing new delivery.
As we bid adieu to the strongest decade the industry has ever experienced, here is a look at the current equity landscape as we enter a new one.