I’m Joe Stampone. I work at Atlas Real Estate Partners (‘AREP’), a private real estate investment firm focused on value-add multifamily investments. ASotREG is a place where I share my thoughts on real estate as a career, technology, entrepreneurship, passive investing, and anything else that piques my interest.
Recent Posts
Things Don’t Stay Good Forever
One of the great things about sharing my thoughts in a public is that I have a record of how I was thinking about things at specific points in time. I can easily revisit old posts to see how wrong (often) or right (10 predictions for multifamily in 2020) I was. Today, in January 2021, multifamily real estate is at a crossroads. Despite a pandemic causing massive unemployment and impacting property performance, low rates, excess capital, and a search for yield has compressed cap rates and increased demand for multifamily. In today’s economy, any asset that generates predictable income is...
Being a Digital Nomad in a Post-Corona World
As we welcome 2021 and look ahead to a post-Corona world, I’ve been thinking about a few of the trends accelerated by the pandemic and how they may impact my life in the future. One of my personal interests is lifestyle design driven by passive income and financial freedom. This is in part why I’m so attracted to cash-flow driven real estate. I have always been intrigued by the idea of traveling for extended period times and becoming engrained in local communities and cultures. My ultimate goal is to have full control over my time while doing work I care about with people I admire....
Rethinking Class B Multifamily Supply Risk
At Atlas, we focus primarily on value-add workforce housing. One of the most attractive aspects of the asset class is that it’s difficult to add new supply. Capped supply + growing demand = outsized income growth and price appreciation! But just how capped is supply of value-oriented multifamily? In a previous post I wrote about the constraints to building middle-income housing, however, I’m beginning to reassess those constraints. When the incentives to build are strong enough, creativity and ingenuity kicks in. Here are 3 main drivers that could lead to increased supply of workforce...
Weighing in on the Remote Work Argument
In a post I wrote back in April, the early days of the pandemic, I posited that many companies will ‘adopt a full or partial work from home schedule’ post-COVID. It’s now November, more than 8 months into the pandemic, and I’m more convinced that the way people work will be forever altered. This will shift the demand for office space and effect home and apartment design. We’ve been thinking about remote work all wrong and the current argument is lacking key points. First, let me paint you a picture; you’re working from your dining room table or spare bedroom, you have young kids running...
The Future of Single-Family Rentals
There are few real estate sectors hotter than the single-family home rental business (SFHR). What started as a distressed opportunity following the Global Financial Crisis, is quickly becoming an institutional asset class. The combination of demographics (aging Millennials) and accelerating trends such as remote work has led to strong demand and rent growth. From the operational side, advancements in technology have enabled owners to more efficiently manage a disbursed portfolio of single-family rental homes. I’m bullish on the sector and believe single-family rentals are well-positioned...
What’s going on with Multifamily Rents and Occupancies at Class B/C Properties – October 2020
Multifamily as an asset class has performed well since the onset of COVID, especially Class B and C properties. As of the end of Q2, occupancy and rents were more or less flat. This is staggering when you consider employment was down 11.5 million jobs and the Q2 GDP declined by an annualized 32.9%. Let’s unpack the story, starting with occupancy. The strong occupancy is easier to explain than resilient rents. Most impactful has been the many forms of eviction moratoriums. Residents who would typically be evicted for non-payment or skip to avoid eviction, are hunkering down and remaining...
The State of Evictions and the Role of Housing in Poverty
If you work in multifamily real estate (especially workforce housing), you’ve probably spent a lot of your time recently monitoring collections, modifying payment procedures, and working with delinquent residents. You’ve been closely tracking the various eviction restrictions enacted by the CARES Act, state and local agencies, and the CDC, trying to make sense of what it all means and what adjustments you should be making at the property-level. You’ve likely lost sleep thinking about the impact the expiration of the additional $600 per week in unemployment benefits may have on collections...
What’s Going on with Multifamily – August 2020
As I write this, I’m sitting in my home office, working at full capacity. The S&P 500 is back near all-time highs and asset prices have remained high, driven by the reduction of interest rates to near zero and the liquidity that has flooded the markets. Things almost feel good. What’s happening in the economy, however, is a stark contrast. In Q2 we experienced the greatest setback in history (based on GDP decline), COVID-19 isn’t anywhere close to being under control, and a second spike is looming, complicating efforts to re-open the economy. In May, I wrote about the widely-held...
‘Co-Living meets #vanlife’
In my previous post, I discussed the concept of living-as-a-service, flexible housing models driven by technology which cater to young professionals who can work and live anywhere. The accelerated trend of remote work along with the growing passion economy is fueling these new housing models. While we’re seeing innovation within traditional housing models, we’re also seeing non-traditional housing models emerge such as Kibbo. Kibbo is a network of high-end RV parks which cater specifically to ‘remote-working, previously urban professionals (PUPs)’. For $1,000/mo. members get access to...
Living-as-a-Service
Multifamily real estate is shifting from an asset class to a business. What was once viewed as a ‘passive’ investment is becoming a sophisticated operation. Accelerated by the Coronavirus pandemic, the preferences of today’s renters have changed. The one-sized-fits-all model of the past is dead. Knowledge workers expect flexibility. They’re not tethered to a single geographic location. They expect to access everything seamlessly through technology. And they expect great customer service. The game has changed, creating opportunities for nimble real estate firms and new entrants into...
Building more Middle-Income and Workforce Housing
At Atlas, we focus primarily on acquiring value-add workforce housing. A big part of our investment thesis is that you can’t build new middle-income housing, so supply is capped while the demand for high-quality middle-income housing keeps growing. This is just a fact accepted by most real estate operators and as a result, capital has poured into workforce housing, cap rates have compressed, and returns are squeezed. Few understand the dynamics at play which make it nearly impossible to build much-needed middle-income housing today. To better understand why we aren’t building...
This is the moment we’ve all been waiting for
I started my career in real estate in 2009. For the first 11 years, I enjoyed one of the longest expansions in history. I remember thinking in 2015 that assets were expensive and good opportunities were hard to come by. I’m not sure where that came from. Perhaps it was purely the fact that assets in 2015 were much more expensive than they were in 2011? Regardless, I never pretended to know where we were in the cycle. Here’s what I wrote in 2015: I have no idea “what inning” we’re in. Market pundits spend a lot of time talking about what inning we’re in and whether or not we’re in a...
What’s going on with Multifamily Collections?
If I were to tell you that ~40% of your residents were unemployed, what do you think that would do to rent collections? Would you believe me if I told you multifamily collections were more or less unaffected through May? Probably not. So what’s going on? One of the sad realities of the coronavirus is the disproportionate impact it has on those at the lowest income and education levels. Most wealthy individuals can work from home and escape areas most hard hit by the virus. The individuals putting themselves at risk by working are doing so because they must. A majority of those who have...
COVID-19 Impact on CRE: Accelerating Trends and Secular Shifts
There’s a lot of chatter and speculation in the commercial real estate community about what a post-Corona world will look like. Is business travel dead? Will consumers ever shop in malls again? Are we all going to be working remotely? Are people going to move out of cities and into the suburbs? Will we have to practice social distancing in restaurants and bars? What happens to gyms and fitness classes? Who knows. I think the world is going to look very different over the next few months, but we’ll eventually begin to act more and more like we did pre-Corona. It’s important to remember...
Reflections on Working from Home
Over the past few years, I’ve spent most of my time working remotely either on the road traveling to properties or out of my apartment. I’ve created an environment and workflow that’s conducive to remote work and I utilize technology to communicate seamlessly with the rest of my team. I’ve enjoyed the benefits of working from home; no commute, an asynchronous schedule, and the ability to hang with my daughter throughout the day. For me, remote work was a strategic choice and a luxury afforded to me. The COVID-19 pandemic has forced all teams to adopt a remote working environment and...
Should I pay my rent?
Over the past 3 weeks, nearly 17 million people filed for unemployment. True unemployment at this moment is about 18%, compared with just 3.5% as of the first week of March. Many of these individuals rent apartments, have little in the way of savings, and find themselves in a difficult position. Thankfully, the government has taken swift action. The recently enacted CARES Act puts money in the hands of individuals so they can keep paying their bills, but the timing of the stimulus remains uncertain. The CARES Act also put a moratorium on evictions for any property financed with...
Thoughts on COVID-19 and the Impact on Workforce Housing: March 22nd, 2020
I started my career in the real estate business in 2009, the bottom of the Global Financial Crisis. It’s been a historic 10+-year run for the multifamily sector. The combination of economic growth, organic rent growth, compressing cap rates, and sustained low interest rates lead to great returns. That’s easy to say looking backward. There were many moments over the past 10 years where it felt like pricing was frothy and the music was ready to stop. My career has always been underscored by the risk of a recession driven by an unknown catalyst. I graduated from college in 2008 and saw...
3rd Party Property Management: Far from a Set it and Forget it Solution
Many multifamily operators (Atlas included) utilize 3rd party property management to oversee the day-to-day management of their properties. It’s great in many ways. You can maintain a lean team, utilize the resources of a large institutional management firm, and make a change if they’re not performing up to your standards. That said, implementing a 3rd party to oversee your deals is hardly a ‘set it and forget it’ solution. Multifamily properties require aggressive hands-on asset management and certain tasks must be handled at the ownership level. In my experience, here’s what 3rd party...
Lifestyle Brands Physical Real Estate Strategy Extends Beyond Retail
The way lifestyle brands approach their physical real estate strategy is changing. As sales have shifted online, brands have begun to utilize their physical presence to deepen their relationship with the consumer, share their story, showcase their products, and ultimately fuel (online) sales. This strategy is not just being deployed across conventional retail space, we’re beginning to see consumer brands in multifamily, hospitality (hotels/restaurants), and the condo business as well. Multifamily, until recently, was a relatively commoditized product that competed on price and location....
The Game has Changed: The Importance of Connecting with Residents
Direct to consumer brands (think Harry’s, Warby Parker, and Casper) have stolen market share from the incumbents. Their success isn’t because they have a slightly better product, it’s because they are obsessed with connecting with the customer. Real estate owners/operators can learn a lot from the success of digitally native DTC brands. In the apartment industry, there is little brand awareness and almost no brand loyalty, so residents are up for grabs. Owners who resonate with prospects, offer a great value, and cater to their lifestyle will ultimately win. I spend a disproportionate...