Jay Parsons’ Post

This is good and bad news, values getting reset on Class A #multifamily in over supplied markets and with lease up risk the next few years, you want to know your submarket, competitive cost basis, and leasing activity. With 50% slow down inconstruction starts in the US and 20% off in new home building starts, the demand and wage growth will likely pass by the supply in the long run. Still bullish on development at the right basis and in the high barriers to enter pockets. Also interesting to watch my peers getting into value plays below replacement cost. A developer works for 5-10 years to create a community only to have it sold below replacement cost. In So Cal developers were building sub 5 ROCs and had to sell for a sub 4 cap to make a spread / profit. In some cases, investors can step into a 4.25-4.75 cap for Class A assets as Seller liquidate at discounts to generate earnings. What’s interesting is buyers are going in with risk with negative amortization and hoping to get to into the black showing belief in resiliency of the market and depth of captial on the sidelines.

Great summary from Jay Parsons on KKRs move to acquire $2B of multifamily assets from Lennar at a cap rate in the low 5% range. We share a similar thesis as KKR that we are seeing a "once-in-a-decade" opportunity to acquire strong assets at a discounted basis, knowing that we will likely face ~18 months of softness followed by a strong rebound in growth fueled by strong demand and limited supply. If this thesis aligns with you and you are an accredited investor, I would like a look at our next acquisition opportunity, Solana at the Crossing. http://www.solanaindy.com <----- Learn more, get the deck, scheduel a meeting today. Accredited investors only. #multifamily #realestate #investing #investingtips #notinvestmentadvice #cashflow #indianapolis #midwest

Great post from everyone’s favorite #CRE Weatherman on KKR’s big #Multifamily buy and the forecast from here. ⛅️🌤️☀️ Investors seeking quick turnarounds should probably avoid the sector right now, but for those with a ~3-5 year horizon, it seems like a great time to get in (before more big buys hit the news).

KKR makes a big move into the apartment market with their $2.1B acquisition of over 5,200 apartment units. The acquisition involved newly built developments from California, Texas and NJ. Building starts with five or more units dropped 51.7% year-over-year to a seasonally adjusted rate of 278,000 in May. This reflects that over-building has occured in many markets with new rents declining. Long term investors will see the drop in building activity as a positive. Only four large metros have rents rising at 5% over the past year. Apartment rents in the US are down -1% YoY. Labor Dept data shows new rents down even more at -5% year-over-year. Are there buyers and sellers for multi-family assets? Yes! Thinking of buying or selling please contact me. Stay informed about the evolving real estate landscape by following me on LinkedIn. #realestate #apartments #multifamily #privateequity #deals #acquisition #california #texas #newjersey #kkr #blackstone #lennar #sanfrancisco #losangeles #sandiego #marin #sonoma

KKR recently completed its largest-ever purchase of apartment buildings, marking a trend of significant investments by top-tier firms in the multifamily housing sector. The New York-based private-equity firm acquired over 5,200 apartment units nationwide for $2.1 billion. These units are spread across various states, including California, Texas, and New Jersey, and are part of a portfolio comprising 18 new mid- and high-rise buildings. The transaction, finalized on Tuesday, reflects a growing optimism in the broader rebound of multifamily housing, despite recent challenges in the sector. Rent growth for new leases has remained stagnant for over a year amidst a record construction surge, while increasing interest rates have impacted property valuations. https://lnkd.in/grCaUp8d

Institutional investors are jumping back into the market! Stabilizing supply dynamics and continued demand for multifamily housing is providing support for future rent growth. This week, KKR solidified its bet that trend will continue with its $2.1 billion portfolio acquisition of over 5,200 apartments in markets nationwide. With institutional multifamily pricing down about 20% from its peak nearly 2 years ago, could this acquisition and others recently completed by private equity backers be a sign the institutional investment market more broadly is seeing a bottom in multifamily pricing? Private client multifamily has seen a similar decrease in value over the last 2 years but has enjoyed a pick-up in investment activity YTD, with investors lured in by various factors. Many times, this includes an attractive cost basis, potentially lower than replacement cost. Time will tell if wagers by these early movers pay off, but with stabilizing costs of capital, additional clarity looking forward, and the big fish beginning to bite, we could be in for a years-long bull market. What do you think? Looking at any potential investments yourself? Send me a message . I'll be happy to offer any insights CBRE has available to help you make the best investment decision you can. #SoCalPrivateClientLending #AgencyLending #FreddieMac #FannieMae #Multifamily #MultifamilyInvesting #MultifamilyRealEstate #MultifamilyFinance #CommercialRealEstate #CommercialRealEstateFinance #PrivateClient #PrivateClientLending #CRE #CREF #CREFinance #CBRE #CapitalMarkets #Debt #Finance #InvestmentProperty #1031Exchange #Refinance #Acquisitions #Loans #LoanOptions #MortgageBroker #MortgageBanking #CMBS #BankLending #DebtFunds #LosAngelesRealEstate #LARealEstate #CaliforniaRealEstate #CARealEstate #OrangeCountyRealEstate #OCRealEstate #SanDiegoRealEstate

Are apartment rents headed higher again? KKR has completed its largest-ever purchase of apartment buildings, the latest in a string of big-ticket deals, signaling that some of the most prominent investment firms are betting on a broad rebound for multifamily housing.  The New York-based private-equity firm paid $2.1 billion for more than 5,200 apartment units across the country, from California and Texas to New Jersey, KKR said. The deal for the multifamily properties, which are 18 new mid- and high-rise buildings, closed Tuesday. KKR’s acquisition and other recent major purchases could indicate a growing confidence among large investors that rents and values for apartments will soon begin rising again. Rent is already starting to pick up in several Midwest and Northeast cities. In April, Blackstone agreed to pay $10 billion for the landlord Apartment Income REIT, while last month Brookfield bought a portfolio of 7,000 apartments for $1.55 billion. #inflation #housing #apartments #rents #privateequity #KKR #multifamily #housingshortage #blackstone #brookfield #commercialrealestate

Institutional firms placing large bets on the U.S. apartment building market. The apartment sector has been struggling as of late, and valuations are below the premiums that they traded at in the last 2 years. Apartment-building prices were down more than 20% in May from their July 2022 peak, according to data firm MSCI Real Assets. Where there is distress, there is deals to be made. Well-capitalized investment firms see this period as an opportunity and have been quite active this year. KKR closed on a $2.1 billion portfolio of 5,200 units across the country. This follows a $1.64 billion dollar purchase of a student housing portfolio back in April. Blackstone is ramping up investment in the apartment space, announcing its $10 billion purchase of AIR communities back in April. Brookfield is buying a 7,300 unit apartment-building portfolio for $1.55 billion, spread across 11 markets. Such acquisitions could indicate a growing confidence among large investors that rents and apartment valuations will soon begin to rise again. Could the next 12 months be a turning point in the market for apartment buildings? #commercialrealestate #realestate

🏢💼 KKR Bets Big on Apartment Market Rebound with $2.1 Billion Purchase 💼🏢 📢 KKR is making headlines with its largest multifamily real estate investment to date! The firm has acquired 18 complexes from Quarterra Multifamily, a subsidiary of Lennar (LEN), for a staggering $2.1 billion. This massive deal includes over 5,200 units in Class A midrise and high-rise buildings across key states: Washington, California, Colorado, Texas, Florida, Georgia, North Carolina, and New Jersey. 🌟 🔍 Deal Details: - Portfolio Size: Over 5,200 units in prime locations - States Involved: WA, CA, CO, TX, FL, GA, NC, NJ - Operators: KKR will partner with Carter-Haston, MG Properties, and Dalan Real Estate to manage the assets 📈 Portfolio Growth: This acquisition boosts KKR’s real estate portfolio by 3%, now making up 12% of its $575 billion assets under management. KKR is leveraging current market conditions, which they view as favorable for long-term real estate investments, highlighting significant economic potential. 🔑 Why It Matters: KKR’s substantial investment underscores a robust confidence in the multifamily market’s recovery, even in regions previously hampered by high supply levels. The firm anticipates rent growth for high-quality rental properties, especially in strong markets like California and New Jersey. 🌟 Houston Spotlight: Houston's population growth continues to positively impact the rental market. With an increasing demand for housing, the multifamily sector in Houston is poised for recovery and growth. 📊 According to recent data, Houston's rental market has shown resilience with a steady increase in rental rates, reflecting a strong economic environment and a promising sign for multifamily market recovery. 🚀 The Takeaway: KKR’s bold move signals a bullish outlook on the multifamily market. Despite recent challenges, the firm believes in the long-term potential for rent growth and stability in the rental market. This investment is a testament to the enduring value of high-quality rental properties in thriving markets. 🔗 #RealEstate #Multifamily #Investment #Houston #RentalMarket #KKR #Quarterra #Lennar #EconomicGrowth #MarketRecovery #PropertyInvestment #AssetManagement #PopulationGrowth

Multifamily Real Estate Perspective KKR's recent acquisition of over 5,200 apartment units for $2.1 billion highlights a growing confidence in the multifamily housing market. Despite recent struggles in the sector, such as flat rent growth and higher interest rates that have suppressed property valuations, prominent investors are signaling a potential rebound. With a downturn in new construction starts suggesting a forthcoming decrease in supply, rent increases are expected to accelerate by 2026. This shift is creating attractive investment opportunities, particularly as distressed properties become more prevalent. For investors, this could be a strategic time to consider multifamily real estate, especially in markets where future supply constraints are likely to drive up rents. https://lnkd.in/gPC4rFWt