• Ryan McKenna

In the Multifamily Sector, Recession Could be Further Out than Many Think


Written by Carole VanSickle Ellis


Panelists agree the southeastern United States remains a region representative of great opportunity for multifamily investors.

While many analysts say they believe the U.S. economy will experience the beginnings of a recession sometime before the end of 2020, the jury is certainly still out. Panelists at the IMN Multifamily conference in Orlando, Florida set forth several alternative views to what is rapidly becoming “conventional wisdom” on the topic of a recession. Yet, they did not reach a consensus on the topic.

Jeff Adler, vice president at Yardi Matrix and moderator for the panel, presented a list of five economic indicators that tend to presage a recession. “Based on those indicators, we have anywhere from 2.5 to 9 years before the next recession,” he observed. Adler added, “I’m thinking 2021, and I think it will be relatively mild.”

Jack McCabe, CEO of McCabe Research and Consulting, predicted the recession would come sooner rather than later. “We are headed for a recession,” he stated firmly. “The Trump tax codes put it off and postponed it, but they didn’t stop it.” McCabe added that he believes multifamily developments, particularly class A developments, will likely face a period of rent concessions and falling rent rates if they want to maintain low vacancies.

Justin West, a vice president with Marcus & Millichap, observed that his company is seeing a number of multifamily investors begin to investigate selling off some of their assets, possibly because they believe the sector has reached its peak during this market cycle. McCabe agreed, noting, “I’m noticing an uptick in the listings of apartment complexes” but adding, to general consensus, “If you can buy a class B or C property at the right price, there is still a lot of opportunity.”

Carlos Burneo, senior director at TH Real Estate, concluded, saying his company is still “’bullish’ on the apartment sector” because they believe innovation within the sector will counter other factors. The group also agreed the southeastern United States remains a region representative of great opportunity for multifamily investors.


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