Adam Hopson

Is Seattle a Seller's Real Estate Market? Yes, Seattle is still considered a seller's market in 2024, though there have been some shifts. Here's what to consider: Low inventory: There are more buyers than available properties, which gives sellers leverage. Faster sales: While not as fast as in the past, homes are still selling relatively quickly. Price appreciation: Housing prices are still rising year-over-year. However, there are signs of a slightly less competitive market: More listings: Inventory is increasing compared to the height of the seller's market. Fewer bidding wars: While homes may receive multiple offers, it's not as common as before. https://lnkd.in/gntpZWV If you're thinking about buying or selling, the MLC Team is here to help. Reach out to us for expert guidance and support in this competitive market! 🌐 Website: https://lnkd.in/gvsRuemm 📧 Email: deal@mlcompanies.co 📞 Phone: (206) 322-3325 Visit us at 16400 Southcenter Parkway, Suite 206, Seattle, Washington, 98188 USA

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Here is a summary of our latest performance metrics and outlook for #multifamily: -Q2 is seeing slower seasonal growth than past years, but at least occupancy rates and rent levels are stable or increasing in most areas (sequentially, not necessarily year-over-year). -Annual rent growth for new leases is still down 1.5% at the U.S. level, and it is forecasted to average a 1.1% decline for the full year. The hardest hit markets like Atlanta, Raleigh, and Austin are pulling down the national number. Rents were down 5% or more in those markets compared to where they ended the prior May. -Occupancy has barely moved all year. Again, it could be worse. It’s stuck at just below 94%, but at least stable at the U.S. level given all the new supply. -Nine of 45 markets published by Radix had occupancy rates higher than 95% at the end of May. That list included New York, San Jose, DC, and Boston. Those nine markets also averaged inventory growth of just 2.1%. -Dallas, Austin, San Antonio, and Atlanta had occupancy rates at 93% or lower, and their average inventory growth of 5.0% was more than double the relative amount of the previously mentioned group. -Traffic counts do not indicate a surge of leasing activity is on the way. At least, not enough that would significantly improve the current momentum, especially with prime leasing season nearing its close. -Focus will soon be turning to 2025, which has the makings of a stronger year if the economy and labor market can hold. Link to press release 👉 https://lnkd.in/dwcRnfJx

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Q1 2024 Industrial Stats: San Fernando & Ventura out now! Vacancy rates have stayed same at 1.5% from Q4 2023 to Q1 2024, asking rent has also stayed the same at $1.54 NNN. Overall, the San Fernando Valley & Ventura industrial market continues to see tight conditions as vacancy and availability remain at historically low numbers. #industrialcre

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Rant: The “Forbes 30 Under 30” crowd strikes again. When you have zero interest rates for so long, and most syndicators were in high school during the Great Financial Crisis, this is what happens. From 2020 to 2022, apartment syndicators like Tides Equities took the real estate market by storm, using highly leveraged bridge loans to finance their acquisitions. Led by Sean Kia and Ryan Andrade, Tides acquired over 30,000 units with a business model based on hefty renovation-driven rent hikes and perpetually low interest rates. However, as the Federal Reserve raised rates 550 bps, Tides faced massive defaults, foreclosures, and investor losses, showcasing the dangers of over-leveraging and unrealistic financial assumptions. Other syndicators followed a similar trajectory. Jay Gajavelli of Applesway Investment Group, mentored by online scam artists like Brad Sumrok and Grant Cardone, saw his properties plagued by neglect and ultimately foreclosed. GVA’s founder Alan Stalcup, with no real estate experience, also succumbed to the market's harsh realities, with over $1 billion in loans tied to his properties facing distress or foreclosure. The story is the same across the board: unskilled but ambitious founders rushing to capitalize on easy money, only to falter when the economic environment shifted. This wave of failures underscores a deeper issue: the central bank’s money manipulation and federal policies that fueled such malinvestment. Without zero-interest-rate policies and the injection of trillions of dollars into the capital markets, the apartment bridge loan market wouldn’t have reached the scale it did. A free market based on merit and ability would naturally have sidelined these incompetent syndicators. It's a stark reminder of the risks inherent in chasing quick profits without a solid foundation of expertise and sustainable strategy. Unfortunately, it’s the middle-class investors who get stuck holding the bag in the lowest to barrier sub-asset class in commercial real estate: multifamily. #RealEstateInvesting #InvestmentStrategy #MarketTrends #Finance #EconomicInsights #RealEstateSyndication https://lnkd.in/eDUjZZ-K

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Camber Creek portfolio company Azibo is changing the game for small to medium ('SMB') landlords by offering a software suite typically reserved for mid market to enterprise grade property managers. Check out the link below. The flexibility described (customizable late fees, etc) is impressive, especially considering the typical lack of optionality. Enterprise grade capability for the SMB market. Game changer. Also, Azibo CEO Vikas Gupta is a rock star. #proptech #fintech #venturecapital #multifamily #realestate

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Such a great question from Jerrid Anderson on a recent podcast appearance. When I first entered the industry, my attention was tightly concentrated on the tri-county region of the Puget Sound. At the time, it seemed like the best strategy to establish a strong local presence and expertise. However, as I stand here in 2024, I realize that the landscape of retail and commercial real estate has evolved significantly. The clientele and investor pools have expanded far beyond regional confines, embracing a more national—and even global—scope. Limiting myself to the Seattle metro area meant missing out on incredible opportunities across different markets. If I could turn back time, I would cast a wider net, exploring and investing in properties beyond the local scene. There are countless remarkable properties and opportunities that aren't confined to any single geographic area. This broader perspective is crucial for anyone looking to thrive. Let my experience be a reminder: don't box yourself into a geographic corner. The world is vast, and so are the opportunities within it. #CommercialRealEstate #RealEstateInvesting #IndustryInsights

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You can only kick the can down the road so far before it rolls down the hill and fall off a cliff…. Several California banks are dangerously overexposed to commercial real estate (CRE), with 31% of them carrying loan portfolios three times larger than their capital, according to a recent analysis by Bloomberg. This revelation comes amid rising inflation and warnings from economists like Larry Summers about potential interest rate hikes in 2024, further exacerbating the challenges facing banks reliant on rate cuts to stabilize their CRE balance sheets. With nearly $1 trillion in commercial mortgage-backed securities (CMBS) loans set to mature in the next year and foreclosure filings on CRE properties in California already tripled from last year, the specter of another banking crisis looms large. Despite efforts to enhance oversight following the collapse of institutions like Silicon Valley Bank and First Republic, many smaller California banks may have escaped regulatory scrutiny, leaving them vulnerable to market shocks. https://lnkd.in/evhkbW5N

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It is easy to get lost in the numbers when it comes to selling your business, but it is important to remember that the numbers only tell one side of the story. Both buying and selling a business come with significant mental and emotional ramifications. Why is this so critical to understand? Sellers who are not emotionally ready might subconsciously take steps to interfere with the sales process. Typically, sellers have invested a great deal of time and effort into their business, and as a result, they may simply not be truly ready to sell. Before the day comes to put your business up for sale, pause and reflect on whether you are 100% onboard. https://lnkd.in/g4kUUeCf

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The hardest thing about cash flowing an apartment The people that get paid the least have the biggest impact on apartment building value. The leasing agents! 👩‍💼👨‍💼 Why don’t we just pay the leasing agents more? Because apartment investments in Seattle yield about a 4-5% margin. 📉If we pay the leasing agents more, we give up all our cash flow. Has anyone solved this problem? 🤔 Let me know below in the comments! #RealEstate #ApartmentInvesting #LeasingAgents #Seattle P.S. This is my make up post for #Day19of20

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As we reach the midpoint of 2024, I thought it would be valuable to share some real-time data and insights on current market trends: • Since January 1, 2023, there have been only 13 multifamily sales above $15,000,000 in the greater Sacramento region. Most transaction activity is in the sub-$10,000,000 range, with a significant concentration at or below $5,000,000. • Of the six transactions we've completed so far in 2024, three were all-cash, two were conventionally financed, and one was financed with short-term bridge debt. Only one Buyer was involved in a 1031 exchange; the rest were opportunistic. • Credit Unions and Agency (Fannie/Freddie) debt are offering the most favorable rates and terms for conventional financing of small to mid-sized apartment buildings, with loan-to-values in the 40%-50% range and rates in the low 6's. • Currently, there are 43 multifamily buildings listed for sale in the greater Sacramento region (source: LoopNet), not including properties under contract or privately marketed. There's lots of inventory and less Buyers. • Properties with Seller carry-back financing or assumable loans below 5% are generating significantly more Buyer engagement than those that are not. • Our team has completed 46 new Broker Opinions of Value (BOV) year-to-date in 2024, compared to 27 for the same period in 2023. Many owners are curious about the value of their buildings and looking for ways to improve their situation. • Insurance issues continue to persist, especially for buildings with Zinsco electrical paneling, galvanized plumbing and pre-1980's vintage. Most new acquisition quotes we're receiving from insurance brokers are in the $1,000/unit range or higher. My final point (I recognize my bias here) is that choosing the right broker to sell your building today is more crucial than ever. Reflecting on my role as an exclusive listing agent from 2013 to 2021, my primary task was to generate maximum exposure and leverage market expertise in order to create a competitive bidding environment, ultimately securing the highest price for our clients. Buyers were abundant, rent growth was robust, and the cost of capital was cheap. We brokers liked to think of ourselves as heroes during that time, but truthfully, we had the wind at our backs. While maximum exposure and market expertise remain essential for achieving the best outcomes for our clients, our true value lies in our advisory-driven approach. We manage expectations for both buyers and sellers, anticipate issues before they arise and prepare each party to overcome them, provide real-time market feedback, thoroughly vet each buyer before offers are submitted, attend inspections and property tours to influence positive outcomes, and align buyers with the best loan and insurance options to mitigate renegotiation. These are just a few of the things we do on a daily basis when you hire ALIVE. As the old saying goes: issues don't kill deals; surprises do. -Spencer Moyer

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🚀 Investing in Seattle Real Estate: Lessons, Strategies, & Market Insights 🚀 In our latest episode of the Seattle Multifamily Podcast, I sat down with Chris Garvin a seasoned investor (and friend) with over 15 years of commercial real estate experience. Chris has executed over $400 million in capitalization, establishing his company as a leading investor and operator of multifamily assets in the Seattle metro. He shares his journey from a broke college kid to a prominent figure in real estate, providing insights on key transactions, market strategies, and navigating Seattle’s ever-changing landscape. Key Takeaways: ⏰ Timing is Everything: Discover why now might be the best time to invest in Seattle real estate. 🏢 Value-Add Investments: Learn about Chris’s unique approach and the critical importance of addressing deferred maintenance. ⚖️ Regulatory Impact: Understand how regulatory changes and economic factors influence property investments. 📚 Real-Life Lessons: Chris shares real-life examples of both successful deals and lessons learned from less favorable transactions. You won't want to miss this episode! It's full of actionable advice! 👉 Watch Now and don't forget to subscribe to our channel for more expert advice and market insights! https://lnkd.in/dyRwhk-K #Day5of30 #RealEstateInvesting #SeattleRealEstate #InvestmentStrategies #MarketInsights #MultifamilyInvesting #ChrisGarvin #SeattleMarket #RealEstateTips #InvestmentAdvice #PropertyInvestment

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It was great to connect with everybody at the Connect CRE conference in Phoenix. I had the pleasure of sharing the stage with Kimberly Byrum (formerly Fiala), Casey Gilchrist, and Barry Cox to give an economic and #multifamily performance update. Summary (Phoenix focused): Economy - Still one of the strongest markets for housing demand due to jobs and population movement. A diverse set of industries and associated incomes are moving to Phoenix. Despite strong demand, concessions are up and supply will continue to impact operational results until at least the end of this year and likely through 2025. Capital markets - Remains very challenging with typical players sitting on the sidelines. Big increase in BTR supply on the way in addition to multifamily. Helpful for those that want single-family home living but can’t afford it. Bullish on BTR demand due to demographics. Interest rate expectations are obviously the biggest headwind. Fairly conservative on interest rate cut outlook. Development - Great long term, but challenging for development through 2025. A little too much cottage-style BTR. $20k per unit is moderate cost for a multifamily renovation today. Customer satisfaction has to be a focus now more than ever for lease-up velocity due to review sites. 6-8 weeks of concessions are normal, important to retain residents to not have to offer that on the next lease. Financing - Key is creating as much certainty in the process due to today’s environment. Get ready for rates to remain higher for longer. Discount to replacement cost is a major theme for the few acquisitions happening. Insurance is putting downward pressure on NOI in underwriting…but AZ is in better shape than many other markets. Taxes and insurance are much more predictable in Phoenix. Next 18 months will be very tough, but past that has a lot of upside. Radix

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Banks are getting squeezed on CRE loans right now. Despite only marking ~1% as non-performing loans (NPLs) on their call reports actual defaults are 2x-3x higher than their balance sheets indicate due to 'Extend & Pretend'. The 300% Red Zone rule on bank CRE lending isn't as much a concern as the CRE collateral backing the loans, which is nearly impossible to determine at scale prior to banks filing NOD in court. Larger cities typically have more expensive CRE, hence the higher CRE to TRBC ratios- it's not a big deal. The bigger issue here is the roughly 4,000 'too small to bail' banks (<$5B AUM) with relatively small CRE loans that have already lost 50% to 100% of their value. Extend & Pretend only works if interest rates decrease more than the risk premiums and cap rates increase. It's not going to happen for office for at least 5 years or more. Multifamily will have some too. New loan originations and participations that boost net interest income, managed write-downs, workouts and loan sales is the best way for banks to avoid M&A and potential regulatory closure. We're set to have roughly $2 Trillion in matured/extend & pretend loans in the next 12 months. You're first loss is your best loss. #loansales #distresseddebt #officeapocalypse https://lnkd.in/gVRBBhMy

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Elevate Your Portfolio, Even With Capital Constraints 🚀 Perceived high capital entry for apartment investments? Our insights demystify the process, offering a path forward. #InvestmentStrategies https://bit.ly/3Xj9Iys

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R&D activity in Silicon Valley has been strong, driven by the rise of artificial intelligence companies and Silicon Valley is well-positioned to capture that demand. Ryan Adlesh shared, “ [R&D demand] is driven a lot by heavy power requirements as well as the driver of AI in the market. Anything from data centers to chip manufacturers are affected by the AI ecosystem." Matt Taylor said, "In this region specifically, infrastructure is the most important piece to the success of your building. Whether that's power or lower loading, anything that a company is going to look at and say 'Can I do advanced cutting edge work in this building?'” Read more (potential paywall): https://lnkd.in/dMJrGtAs #CBRE

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