A Student of the Real Estate Game (ASotREG)

I've written over 250 articles. Use the search below for any topic having to do with Real Estate and investing.

Try these: passive investing, asset management, real estate

I've written over 250 articles. Use the search below for any topic having to do with Real Estate and investing.

Try these: passive investing, asset management, real estate

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...

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....

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...

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....

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 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...

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...

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...

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...

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....

Apartments, Hotels, What’s the Difference!?

The way people are living, and traveling has fundamentally changed and the lines between apartments and hotels have blurred. Guests and renters are no longer constrained by a market flooded with watered-down options and brands dictating the experience.  Today, renters and travelers have nearly endless options, catering to any experience they seek.    I recently traveled to Nashville and I decided to test out Niido, an apartment community ‘powered by Airbnb’. It’s a traditional midrise apartment community that allows (encourages, actually) its residents to rent out their apartments...

Bringing a Hospitality Mindset to Multifamily Development

We’re in the midst of a multifamily development boom. If you’ve been to any major city over the past few years, you see ‘stumpy’ midrise developments everywhere. The forgettable stick-frame buildings all look similar. They are relatively cheap to construct, go up quickly, and cater to a wave of demand from Millennials and Gen Z’ers delaying marriage, having kids, and buying or renting a home in the suburb. With the cost of construction and land at elevated levels, development yields are compressed, developers have little flexibility to physically differentiate their property from the...

The Multifamily ‘Amenities Arms Race’ Shows no Signs of Slowing

Multifamily development has picked up considerably over the past few years, as the demand for high-quality apartment communities near major employment centers and entertainment has increased. Driven by demographics, couples getting married and having kids later, lifestyle choices, and pent-up demand, millennials, Gen Z, and some Baby Boomers are flocking to newly-developed class A communities. These individuals seek a lifestyle and expect way more than a nice place to live; they desire conveniences, technology, a robust resident event program and sense of community, and amenities. Lots of...

Do We Need to Change the Way we Think About Homeownership?

My answer to the question posed in the title is ‘I have no idea’. However, I’m a firm believer that homeownership is not the best path for everyone and that the role of homeownership in the U.S. has been skewed in a way that is dangerous. The term ‘American Dream’ comes from James Truslow Adams ‘Epic of America’ who wrote in 1931, “life should be better and richer and fuller for everyone, with the opportunity for each according to ability or achievement regardless of social class or circumstances of birth.” The original term didn’t have anything to do with real estate but has evolved over...