I’m Joe Stampone. I work at Atlas Real Estate Partners (‘AREP’), a private real estate investment firm focused on value-add and ground-up multifamily investments. ASotREG is a place where I share my thoughts on real estate, careers, technology, entrepreneurship, passive investing, and anything else that piques my interest.
Rise of the Boutique Airbnb
One of the trends in real estate I’m most interested in is the rise of experience-focused boutique resorts. These are typically 10 units or less, independently owned and managed, and provide a unique/hospitality-driven experience. These opportunities are made possible by booking platforms such as Airbnb and VRBO and supercharged by social media (Instagram/Tik-Tok/YouTube). What gets me excited about these projects is the opportunity to create a differentiated product through design, creativity, and providing hospitality experiences, which serve as long-term competitive advantages. From an...
Fall 2023 State of the Multifamily Market – Time for Optimism
Although it’s only been a few months since my last state of the multifamily market update, I feel like it’s time to write another one. That post is not dated by any means but needs to be expanded upon. The world is changing rapidly, pessimism has crept in, rates being higher for longer is becoming consensus, and ‘survive until 25’ is the new motto. I spend a lot of time reading and talking with people, attempting to organize my thoughts in a cohesive narrative that drives my investment thesis. This post is another attempt to take all the messy information and weave it into a story that I...
Is there such thing as Alpha in Value-Add Multifamily Investing? Absolutely!
The value-add multifamily (“VAM”) business was the darling of real estate investing over the past decade. In a zero interest rate environment where capital flooded the space, it was impossible to do wrong. The more you bought and the more aggressive floating rate debt you used, the better you performed. What a time! Things have shifted quickly and the sentiment toward VAM investing has turned negative. The real estate rags and online discourse are littered with outlier distressed situations. In November 2022 the co-founder of a well-known syndicator was featured in Entrepreneur Magazine...
Summer 2023 Multifamily Landscape: Best Buying Opportunity in a Decade?
Over the past few years, with the world changing so rapidly, I’ve posted several times on the state of the multifamily market. It’s been a great way to organize my thoughts, distill all the information I’ve been consuming into a semi-coherent narrative, and justify my investment strategy. Here are just a few of the posts: Making Sense of the Multifamily Market (June 2022) A Golden Era for Apartments? (February 2021) What’s Going on with the Multifamily Market (August 2020) This is the Moment We’ve all been Waiting for (June 2020) Suffice to say, my views on the market change quickly, but...
Smooth Operator: The Key to a Seamless Transition
We recently acquired a 256-unit value-add deal in Savannah, GA. Despite being a relatively new asset (2015 construction) and performing well (95% historical occupancy), we intend to upgrade and reposition the property, targeting rents approximately $250 above the market rate at takeover. We believe there is unmet demand in the submarket, which has experienced significant growth in recent years. However, achieving success requires flawless execution and a flexible hold period. Flawless execution begins prior to takeover. We establish goals and expectations for the staff. At Atlas, we...
The Evolution of a Multifamily Syndicator
Every so often, I go back and read old blog posts to get a sense of my thinking at the time. It can be embarrassing (like the bearish case for multifamily in 2019), but others (such as why we prefer value-add deals and long-term holds and our 4 forms of sustainable competitive advantage) serve as incredible resource for me to understand my views at specific times and as a result, reflect on my decision-making. One thing I’ve consistently said over the years is that by establishing trust with our investors, we can scale our high-net-worth capital base. With the use of technology and...
Taking a Differentiated Approach to Developing & Operating Multifamily Real Estate
Over the past decade multifamily investors had it easy; interest rates were nearly zero, debt was widely available and cheap, capital poured into the space compressing cap rates, fundamentals were strong etc. It was nearly impossible not to well. The key to success was just being in game and outperformance meant not selling too early. That’s quickly changed. We’ve shifted from an asset market to an operator market, where success requires buying assets at the right basis and executing well. Outperformance, going forward, will require differentiation. Packy had a great post on...
Expecting Multifamily Distress in 2023? You’re Going to be Disappointed
I started my career in real estate in 2011 and have experienced a decade of low rates and increasing asset values. Success in multifamily investing was driven simply by being in the game. Well, the game has changed. Today’s environment is unprecedented. I’ve been spending an inordinate amount of time recently reading macro news, speaking with brokers, and underwriting deals. We’ve quickly shifted from over-exuberance to fear and everyone I speak to in the multifamily space is preparing for “distress” and lining up capital for buying opportunities. While there has been a much-needed...
Long-Term Trends Impacting Multifamily
As 2022 winds to a close, I’m sure you’re getting inundated with predictions for 2023. While I certainly enjoy making predictions (like I did in 2019), I struggle with forecasting short-term trends. In 2019, for example, I was talking about renter flexibility and the disruption of the STR business. While the predictions were directionally correct, real estate is a slow-moving business with trends emerging over decades, not in a single year. What’s more relevant and interesting to me are the longer-term trends impacting the multifamily industry. At Atlas, we buy/develop quality multifamily...
Reflecting on the Sale of a Winner
When I look back at my time at Atlas over the past 11 years, the mistakes we’ve made have primarily been selling multifamily assets too soon. Selling class B assets in Tampa or Salt Lake in 2016/17, for example. These mistakes inspired me to put a note on top of the deal plaque which says “never sell winners”. The more refined quote I remind myself of is to “hold winners as long as possible and sell losers as quickly as possible.” I look at it every day. A few weeks ago, we sold a winner. One of the first deals we acquired when I joined Atlas in 2011 was a property in Naples, FL. The...
Understanding the 2021 Multifamily Demand Surge
At Atlas, I oversee a portfolio of multifamily assets primarily located in the Southeast. What an easy job that was in 2021! Rents and occupancy boomed as we experienced record new lease demand and high resident retention. The chart below highlights the YoY lease trade-outs by month from Feb 22’ through September 22’. YoY Rent Growth - FL Portfolio This post is my desire to better understand the dynamics of 2020 and 2021 rent growth explosion. At first, it was a bit of a mystery to many housing economists, but looking back it’s obvious. From 2009 to 2015, I Iived in NYC with two buddies....
Multifamily Investors: Ignore the Shiny New Objects and Focus on what Matters Most
I’ve been on vacation the past few days, largely ignoring the deluge of headlines and incessant barrage of market news (what a week to be away!). It’s tough at first because tracking the latest news feels a bit like sport, but over a few days I’ve begun to realize that the news is largely irrelevant and often detracts from my long-term goals. While keeping your pulse on the general market is important, getting caught up in the “shiny new objects” as Peter Linneman calls them, is generally a waste. The daily movements of interest rates, when inflation recedes, speculation on Fed actions,...
Why Multifamily Values are Down 10%-20%
As I’ve noted many times before, I view this blog as a tool to clarify my thinking, vet ideas, and share my views at specific points in time. Given the volatility and uncertainty in the current market, I’ve spent more time reading, thinking and writing recently. The multifamily market today is particularly interesting. I wrote a general update back in June, where I provided an overview of inflation and rates, the single-family housing market, the strength of the consumer, and multifamily supply/demand fundamentals. TLDR: multifamily fundamentals remain strong, I expect rent growth to be...
Making Sense of the Multifamily Market Today – June 2022
The multifamily market today is the strangest in my relatively short career (12 years). The range of potential economic outcomes is wide, and I certainly lack the experience to assess the impact inflation, rates, and a recession may have on the multifamily market over the near-term. What’s great about having this outlet is that I get to write things down and think out loud, documenting my thoughts and doing my best to make sense of the market. While admittedly I’m not sure what’s going to happen, the over-used adage rings true – while history may not repeat itself, it does rhyme. ...
Building Multifamily in Today’s High-Cost Environment
It’s an interesting time in the multifamily development space. Although rents have surged, construction costs, labor, and land prices have increased significantly as well, making it difficult to build anything but luxury projects designed for the affluent renter. At Atlas, we’ve historically focused on value-add workforce housing. Core to our thesis is that it’s nearly impossible to build middle-income housing today given land costs, construction costs, and general NIMBYism. Over the past few years, we’ve launched a ground-up multifamily opportunity zone development platform which we’re...
My Observations of NIMBYism
After 12 years of living in cities, my family bought a house and moved to the suburbs in 2021. We settled in a classic North Jersey train line town, with idyllic tree-lined streets and vibrant downtown. It’s a great place to raise a family. For the most part, we’ve loved living here. It’s a family-oriented community, has a walkable downtown with shops & restaurants, and provides easy access to NYC, Philly, the Jersey Shore, and the Poconos. We couldn’t be happier with our decision. However, there is one observation which has frustrated me; the anti-housing opinion of the outspoken...
How to Buy Multifamily Deals in 2022
It’s no secret multifamily valuations are through the roof with cap rates at all-time lows as capital pours into multifamily real estate, especially in high-growth southeast markets. In addition to cap rate compression, we’re experiencing unprecedented rent growth, driving values up further. The combination of compressing cap rates and rent growth is leading to eye-popping valuations, most notable on a price per pound basis. In the Florida apartment market, where I’m most active, many 80’s vintage deals are trading for ~$350k+ per unit and new construction deals are eclipsing the $400k...
Proud Owner of Class C Apartments
I was talking with a colleague recently about the differences in our two primary investment strategies; class B/C value-add and ground-up development within Opportunity Zones. These are two opposite ends of the apartment spectrum. He made a comment that he loves the concept of building class A buildings that he’ll be proud to show his children one day. That comment stuck with me, and I’ve been thinking about it ever since. In one sense, I get it. Building sexy buildings in cool up-and-coming markets is fun. The high-end design aesthetic combined with modern amenities, great public spaces,...
The Institutionalization of Vacation Rentals
Some of the most interesting real estate deals today are vacation rentals, which is a subset of the more broadly known STR (short-term rental) space. These investments offer the potential for outsized returns and combine my passions for branding/marketing, creating unique experiences, and generating outsized passive cash flow. This post isn’t about the Sonders/Mint Houses of the world and the emergence of semi-professional STR operators who take units within traditional apartment communities (I’ve written about them before). The STR space I’m excited about today are vacation rentals....
When it’s right to Sell Real Estate…Almost Never
I used to be a religious reader of the Howard Marks memos, but at some point they started to get a bit repetitive…“move forward, but with caution...” However, his most recent, Selling Out, really resonated with me. I’ve always believed real estate is best held long-term (although easier said than done) as long as you structure deals in a fashion that enables you to do so, the asset/submarket has long-term upside potential, and there aren’t better opportunities to re-invest proceeds. At Atlas, our biggest investing mistakes came by selling multifamily assets too early. We sold three...