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 as a career, technology, entrepreneurship, passive investing, and anything else that piques my interest.
Recent Posts
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...
Southeast Multifamily: Institutionalization, Rent Growth, and Room to Run?
Happy new year! As we kick off 2022, I wanted to dig into one of the hottest real estate segments, multifamily in high-growth markets in the Southeast. At least once a week I hear about a new fund targeting value-add multifamily deals across the Southeast, an operator opening a Miami office, or an Opportunity Zone fund targeting sites in the Sunbelt. This isn’t just anecdotal, the Sunbelt has been gaining share of the total apartment sales consistently since 2007, growing from ~35% of total sales volume to nearly ~60% today (3Q2021 - RealPage). That growth has come primarily at the...
Viewing Apartments as a Consumer Product
Real estate is a massive and surprisingly complex business (just ask Zillow). Innovation is relatively slow and certain aspects of the business have been done a specific way forever. The challenge when attempting to innovate is deciphering whether things are done that way for a good reason, or just because no one’s attempted to disrupt the status quo. I believe multifamily properties should be viewed as a consumer product, designed with specific customers (residents) in mind. The unit mix, unit layouts, amenity set, branding and marketing, and operational approach should be tailored to...
Breaking Down the Historic Multifamily Rent Growth
2021 has been a crazy year and it’s difficult to comprehend what’s going on. Take the multifamily industry for example. When I speak with people outside commercial real estate, they’re shocked when I tell them about the historically high rent growth and occupancies we’re experiencing today. With COVID issues lingering, relatively high unemployment, and “everyone they know buying homes”, most people assume the multifamily market is struggling. As we all know, that’s not the case. In fact, the opposite is true; apartments are experiencing unprecedented levels of demand leading to...
What I’ve Learned Working on $200M of Ground-Up Multifamily Developments
Since joining Atlas in 2011, we’ve been primarily focused on value-add multifamily investments. We’ve acquired ~7,500 units and have executed light value-add strategies (~$5,000/unit) to extensive repositioning’s (~$40,000/unit). Over the past several years, following the introduction of qualified Opportunity Zones and run up in multifamily asset values, we launched a development arm focused exclusively on ground-up multi deals within select OZ’s. This fits our thesis of buying and owning real estate for the long-term in high-growth markets throughout the southeast. Ground-up...
The Future of Work and the Emergence of the “Neighborhood Clubhouse”
I’m beyond tired of hearing about the future of work. Every podcast, email newsletter, and blog has covered it ad nauseum for the past 18 months. The barrage of headlines, either in support of or against remote work, is adding fuel to the “debate” and forcing people to choose sides. Having said that, I’ve been so frustrated by the narrative, that I wanted to put my thoughts on the subject on the record. What’s great about this format is that it’s my bar and I’m the bartender. I can write about anything that piques my interest and have a record of my thinking. I can look back in 10 years...
What I Learned in 10 Years Working for a Real Estate Owner/Operator
I recently celebrated my 10-year anniversary with Atlas, where I joined as the first hire in May 2011. When I started with the firm, I was single and living with two friends in NYC. I’m now married with two kids and a dog and live in the Jersey suburbs. A lot has changed, both for me personally and for the firm. It’s been a wild ride over the past decade; we bought 50+ deals with a market value over $1.3B, our investment strategies evolved, the team has grown, shrunk, and grown again. We’ve made many mistakes, and I’ve learned a ton. I took some time to reflect on my experience over the...
Crypto – Changing how we work and live
Atlas is under construction on a 310-unit multifamily community in Nashville. Over the past few weeks, we’ve redesigned the common areas, eliminating vanity amenities like game rooms and adding more private office space. The pandemic combined with new technologies has accelerated the flexible work model and is giving rise to a whole new creative class of entrepreneurs. With this in mind, we believe there will be more residents working outside a traditional office so it’s critical to include functional and fully equipped private workspaces within new multifamily communities. The shift to...
The Evolution and Future of Apartment Community Short-Term Rentals
The lines between hospitality and traditional apartment communities continue to blur, with the modern renter expecting flexibility. The way we work has forever changed and we will not go back to our pre-COVID lives once we reach herd immunity. As an apartment operator, we’re responding to demand shifts by offering residents the optionality to lease units on a short-term basis and move out with limited notice. Today, this optionality is provided by 3rd party short-term rental operators who partner with landlords and handle all the logistics of sourcing and managing residents who plan to...
Is there such a thing as a Multifamily ‘Brand’?
Multifamily real estate is evolving to become more of a consumer product. By that, I mean that real estate is becoming more flexible, branded, and focused on the consumer. At the same time, ownership of apartments is rapidly shifting from individuals to regional and national firms. As the industry becomes more institutional, we are seeing firms roll up their communities under brands. I use that term ‘brand’ loosely. A brand, to use Seth Godin’s definition, ‘is a set of expectations, memories, stories, and relationships that taken together, account for a consumer’s decision to choose one...
The Best Amenity is Affordability
There is a lot of conversation within the multifamily real estate development community about the size and layout of unit types. For years, the average size of apartments was trending downward as developers favored density to achieve higher rents per square foot to make deals pencil. In a post-pandemic world where we anticipate more ‘work from anywhere’ including the home, the chatter is around increasing unit sizes. In my view, it’s not that straightforward. What I look at is affordability, functionality, and designing with a specific end user in mind. Here are a few of the topics I’m...
A ‘Golden Era’ for Apartments?
My recent post, things don’t stay good forever, was intended to serve as a reminder that even when things are good, fundamentals matter. It was not a bearish take on multifamily. In fact, I’m as bullish multifamily real estate today as I’ve ever been. Dr. Peter Linneman recently joined Willy Walker to chat about the economy and real estate market. When Dr. Linneman talks, people listen. So when he claimed the next decade is going to be a ‘golden era’ for apartments, the industry took notice. His thesis is straightforward; in a world starved for yield and awash with money, asset classes...
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...