Steve McNeil and Jeff Coyne representing GRS an NV5 Company recently had the opportunity to be a participant in CBRE’s Multifamily Summit in Nashville, TN this April. Below are just a few highlights on what they learned.
2021 was a record year for the multifamily sector of commercial real estate with overall occupancy and net effective rents rocketing past pre-pandemic levels. Near term construction of new multifamily units in 2022 are expected to exceed 300,000-plus. Rising interest rates are likely to place upward pressure on cap rates in 2022, however the strong liquidity of the capital debt markets, mortgage REITS, and other lending institutions are poised for further stabilization.
2022 Outlook – CBRE’s chief economist was cautiously optimistic that the current global instability due to war, inflation, and rising interest rates is balanced by strong (Record) market fundamentals. Although some predictions place emphasis on a relatively flat multifamily sector for 2022 the real estate transaction services space is expecting to be buoyed by aggressive growth in office and specialty assets (Self Storage, Data Center, Etc.).
Last, but certainly not least – there was heavy discussion surrounding Environmental, Social and Governance (ESG). The goal for investors and occupiers, according to CBRE is to align themselves with the needs of the people, planet, and profits surrounding their assets. With new SEC regulations beginning to surface and a noticeable increase in subsidies, consumption, building performance, and new technologies, ESG programs are at the forefront of rental pricing.