It’s not a typical cycle. That much was agreed upon at Commercial Observer’s real estate investment forum on April 18 at the Santander Tower in Downtown Dallas. Katy Carmical, partner with Hunton Andrews Kurth, moderated a panel discussion on the changing investor landscape in the U.S., and talked about what it’s like to work in today’s market.
Tony Fineman, senior managing director and head of originations at Acore Capital, said there is far more capital ready to be deployed than there are deals looking for financing. “We’re flush with capital and want to put it out,” he said. “Sometimes, where we want to put it and where the borrower wants it is not the same. But, we’re a little bit agnostic in that we just need trades to happen.”
Sondra Wenger, senior managing director and head of commercial real estate for the Americas at CBRE Investment Management, said it’s important to be able to pivot and respond to market trends and research. She pointed to work from home trends resulting in far fewer trips to central business districts. “If you look at that from a high level, there is limited supply, they have high occupancies, and there’s a lot of under-market rents making it a really attractive investment today,” she said of neighborhood retail properties.
Mark Roberts, managing director of research at Crow Holdings Capital, said while it’s not a typical cycle, there is a lot to be optimistic about. He said investors are responding to the state of money markets by reducing exposure in the stock market and targeting assets with good yield.
Opinions from the panel about multifamily investment were varied. They agreed, though, that multifamily operation fundamentals remain strong. “Most of the properties you see that are distressed aren’t distressed because the occupancy is not there,” Jay Porterfield, executive director at PGIM Real Estate, said. “They’re distressed because of the financial engineering that went into the capital stack. My living is made around apartments, so maybe I’m biased, but I continue to be bullish on apartments.”
Colin Fitzgibbons, president at Hunt Realty Investments, pointed to Downtown Dallas’ deficit in affordable housing. “It is a problem, and it’s going to affect the overall growth if we don’t figure out a way to address it,” he said.
Most of the panel said places like Dallas are prime targets for investment thanks to favorable business and political environments, and persistent in-migration. A panel on affordable housing in Dallas included SHIR Capital’s Elan Gordon alongside panelists from Builders of Hope CDC, United Way of Metropolitan Dallas, and Avanath Capital Management.