What Greystar’s belief in multifamily says about the health of the economy

CEO Bob Faith said they’re looking for greater exposure to the sector

Feb.February 15, 2020 02:00 PM
Greystar CEO Bob Faith and the Parkside Place Apartments in Cary, North Carolina (Credit: Greystar and Apartments)

Greystar CEO Bob Faith and the Parkside Place Apartments in Cary, North Carolina (Credit: Greystar and Apartments)

Greystar CEO Bob Faith says he’s “very bullish” on the multifamily sector and so are investors, whether or not the economic cycle is past its peak.

When asked if the South Carolina-based firm was looking to increase exposure to the sector or raise more funds for multifamily investments, Faith told Bloomberg that “capital is hungry for yield” and multifamily offered stability going into a downturn.

“When you go into a recession, people still have to live somewhere, and so you might not like the price you get but you can always fill up a rental residential and that’s the great thing about the asset class,” Faith said.

Broadly speaking, suburban and small city multifamily markets in the U.S. are expected to outperform large cities this year. Cities like Austin, Atlanta, and Boston are expected to top larger markets including New York and Los Angeles this year. 2019 was the worst year for New York’s multifamily market since 2011.

Vacancy nationwide is expected to rise as developers keep up a strong pace of development they’ve maintained since 2016. Rent growth is expected to slow.

Faith said that Greystar, which has $14 billion under development (and $36 billion in assets under management), remains focused on major cities and large universities for student housing investments. Speaking about investing in smaller cities late in the cycle, Faith said that there’s some risk where “you just don’t have the scale in those markets that you do in the big cities of the world.”

“The challenge for that it doesn’t take many assets to get your supply and demand out of whack in a smaller city and that’s what you have to watch for,” he said. [Bloomberg] — Dennis Lynch

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