Apartment Finance Today (AFT) held its Annual Economic Outlook and Forecast Conference on April 4 – 5, 2011 in Dallas, Texas. The
conference focused on the future of government-sponsored enterprises (GSEs), the availability of capital, how the market of commercial mortgage-backed securities (CMBS) will unfold, and what the multifamily sector should expect in the form of new realities and operational challenges.
Matthew B. Lester, Founder and Chief Executive Officer of Bloomfield Hills, MI based Princeton Enterprises, joined the dais as a panelist at the AFT Conference. Along with other owners, developers, and managers, Mr. Lester shared his experience and insight on the industries economic growth in the upcoming years.
Panelists indicated that while the outlook for the multifamily industry is inspiring optimism, several factors might still derail the sector’s recovery. The economy is still in the early stages of recovery and while more banks are stepping off the sidelines and issuing construction debt, borrower scrutiny remains at an all-time high.
There is no debate that the industry is in full recovery mode. Occupancies continue to trend upwards, new development activity is starting up again, and the competition in the debt market continues to improve.
The unemployment rate is slowly improving but other economic factors are conspiring against its growth. Job recovery is uneven both geographically and by employment sector and many states still carry an unemployment rate between 9.5 percent and 14 percent. While employment in the private market is improving, the loss of government jobs is hurting many smaller markets.
As cap rates continue to constrict the market, some worry we are getting ahead of ourselves.
For more information on the 2011 Apartment Finance Today Conference click here